10 ms·

It blows my mind that people aren't hiring like mad with high interest rates. It seems like just parking a bunch of money somewhere and letting it accumulate in

It blows my mind that people aren't hiring like mad with high interest rates. It seems like just parking a bunch of money somewhere and letting it accumulate interest would pay for salaries. Shoot, for 10 million dollars you could pay the entire salary of 2 developers without touching a dime of the actual money. Of course I know the economy doesn't work that way, but it is fun to think about.

maerF0x0 3y ago
the cost of borrowing that $10M has gone from 0.25 to 5.5 a 2100% increase. If inflation is above 4-5% then sitting on the money will lose purchasing power. Fear of depr/rec-ession means the products you build might see 0 traction as the economy contracts and the funding to survive dries up.
- indymike 3y ago
  The's another factor: you now have to deal with getting 20% of the tax benefit from an engineering salary since R&D expenses are now amortized over five years.
  - maerF0x0 3y ago
    Agreed, this has a really interesting effect on smaller businesses which may not exist in 5 years. Sure the S&P500 it's unlikely many or any of them go bankrupt in the next 5 years, so they at least know they can _eventually_ write it off. Meanwhile a company may hit bankruptcy in yr 3 despite lingering credits. This can happen when they have profit on paper, but negative cashflow.
    - indymike 3y ago
      > it's unlikely many or any of them go bankrupt in the next 5 years, so they at least know they can _eventually_ write it off. I don't think this really matters all that much to small biz. It really has a lot of effect on the middle, where taking a $50/yr effectively leaves you having to deal with $40m you can't treat as an expense this year. It's a great way to cause unemployment.
- araes 3y ago
  Replying to below because of reply limit. Also, totally not a lawyer, take with that note. Actual text: Emphasis the "be allowed" portion. From: https://www.law.cornell.edu/uscode/text/26/174 https://www.law.cornell.edu/uscode/text/26/174 (a) In general - In the case of a taxpayer’s specified research or experimental expenditures for any taxable year— (1) except as provided in paragraph (2), no deduction shall be allowed for such expenditures, and (2) the taxpayer shall— (A) charge such expenditures to capital account, and (B) *be allowed* an amortization deduction of such expenditures ratably over the 5-year period (15-year period in the case of any specified research or experimental expenditures which are attributable to foreign research (within the meaning of section 41(d)(4)(F))) beginning with the midpoint of the taxable year in which such expenditures are paid or incurred. Imply, the taxpayer "may" take a 20% amortized distribution. Similar to MtG cards that say "a player may look through their library" or similar. You don't have to (my reading).
yterdy 3y ago
They're servicing loads of cheap debt, they don't have the capital.

maerF0x0 3y ago

the cost of borrowing that $10M has gone from 0.25 to 5.5 a 2100% increase. If inflation is above 4-5% then sitting on the money will lose purchasing power. Fear of depr/rec-ession means the products you build might see 0 traction as the economy contracts and the funding to survive dries up.

indymike 3y ago
The's another factor: you now have to deal with getting 20% of the tax benefit from an engineering salary since R&D expenses are now amortized over five years.
- maerF0x0 3y ago
  Agreed, this has a really interesting effect on smaller businesses which may not exist in 5 years. Sure the S&P500 it's unlikely many or any of them go bankrupt in the next 5 years, so they at least know they can _eventually_ write it off. Meanwhile a company may hit bankruptcy in yr 3 despite lingering credits. This can happen when they have profit on paper, but negative cashflow.
  - indymike 3y ago
    > it's unlikely many or any of them go bankrupt in the next 5 years, so they at least know they can _eventually_ write it off. I don't think this really matters all that much to small biz. It really has a lot of effect on the middle, where taking a $50/yr effectively leaves you having to deal with $40m you can't treat as an expense this year. It's a great way to cause unemployment.
araes 3y ago
Replying to below because of reply limit. Also, totally not a lawyer, take with that note. Actual text: Emphasis the "be allowed" portion. From: https://www.law.cornell.edu/uscode/text/26/174 https://www.law.cornell.edu/uscode/text/26/174 (a) In general - In the case of a taxpayer’s specified research or experimental expenditures for any taxable year— (1) except as provided in paragraph (2), no deduction shall be allowed for such expenditures, and (2) the taxpayer shall— (A) charge such expenditures to capital account, and (B) *be allowed* an amortization deduction of such expenditures ratably over the 5-year period (15-year period in the case of any specified research or experimental expenditures which are attributable to foreign research (within the meaning of section 41(d)(4)(F))) beginning with the midpoint of the taxable year in which such expenditures are paid or incurred. Imply, the taxpayer "may" take a 20% amortized distribution. Similar to MtG cards that say "a player may look through their library" or similar. You don't have to (my reading).

yterdy 3y ago

They're servicing loads of cheap debt, they don't have the capital.