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That we permit corporations (particularly public ones) to accumulate such massive cash reserves seems absurd. Perhaps we should consider an 'idleness' tax on ov

That we permit corporations (particularly public ones) to accumulate such massive cash reserves seems absurd. Perhaps we should consider an 'idleness' tax on overly large corporate cash reserves to ensure that the money is put to work.

revelation 11y ago
It is put to work. Apple doesn't have some private Fort Knox in California, all that money is tied up in a variety of financial instruments.
- vannevar 11y ago
  Not tied up enough that it isn't apparently reported as cash. It's an interesting question, though, and maybe an accountant might chime in: when is corporate cash NOT cash? Where is the line drawn?
  - revelation 11y ago
    http://en.wikipedia.org/wiki/Cash_and_cash_equivalents http://en.wikipedia.org/wiki/Cash_and_cash_equivalents Notice that journalists might just summarize everything as cash.
    - vannevar 11y ago
      This would seem to be the crux of it: Another important condition a cash equivalent needs to satisfy is that the investment should have insignificant risk of change in value... It could be argued that money that is not at risk is also not at work.
nanofortnight 11y ago
Inflation is meant to serve that goal.
- vannevar 11y ago
  Is it meant to serve that goal, or is it just the case that in the past, it did serve that goal? Now that it seems nonexistent, maybe we need to provide some other means to achieve the same end?
sp332 11y ago
When someone sells you something, and you pay them money for it, why does it bother you if they don't spend the money? How would you feel if the government told you, in this awful economy, that you had too much money sitting around and should try investing it in something risky or they would take it away from you?
- cheald 11y ago
  > How would you feel if the government told you, in this awful economy, that you had too much money sitting around and should try investing it in something risky or they would take it away from you? It happens. That is, in fact, the explicit point of controlled inflation. The layman just doesn't realize it.
  - eqdw 11y ago
    > It happens. That is, in fact, the explicit point of controlled inflation. Apple's cash is subject to the same effect
    - cheald 11y ago
      Not likely, because Apple's cash is invested elsewhere - they almost certainly don't have a giant iMattress in the back that they're stuffing it into. The "cash equivalents" listed in their financials are things like t-bills and short-term bonds which are, by their nature, inflation-mitigating. You lose value on liquid cash sitting around in a checking account equivalent to the rate of inflation (less interest, which is negligible); companies like Apple know this and keep most of their liquidity in inflation-hedged instruments rather than in checking accounts.
  - sp332 11y ago
    Inflation is very low right now, so I guess the non-laymen aren't too worried about it.
    - cheald 11y ago
      A 2-3% yearly loss in purchasing power adds up; at current inflation levels, $10,000 that sits in a checking account will be worth the equivalent of $8800 today in 5 years. Losing ~20% of your banked value per decade that it sits uninvested is substantial. It'll be worse if inflation is higher.
_rpd 11y ago
If they really don't have a use for the money, they should pay it out to the shareholders as dividends.

revelation 11y ago

It is put to work. Apple doesn't have some private Fort Knox in California, all that money is tied up in a variety of financial instruments.

vannevar 11y ago
Not tied up enough that it isn't apparently reported as cash. It's an interesting question, though, and maybe an accountant might chime in: when is corporate cash NOT cash? Where is the line drawn?
- revelation 11y ago
  http://en.wikipedia.org/wiki/Cash_and_cash_equivalents http://en.wikipedia.org/wiki/Cash_and_cash_equivalents Notice that journalists might just summarize everything as cash.
  - vannevar 11y ago
    This would seem to be the crux of it: Another important condition a cash equivalent needs to satisfy is that the investment should have insignificant risk of change in value... It could be argued that money that is not at risk is also not at work.

nanofortnight 11y ago

Inflation is meant to serve that goal.

vannevar 11y ago
Is it meant to serve that goal, or is it just the case that in the past, it did serve that goal? Now that it seems nonexistent, maybe we need to provide some other means to achieve the same end?

sp332 11y ago

When someone sells you something, and you pay them money for it, why does it bother you if they don't spend the money? How would you feel if the government told you, in this awful economy, that you had too much money sitting around and should try investing it in something risky or they would take it away from you?

cheald 11y ago
> How would you feel if the government told you, in this awful economy, that you had too much money sitting around and should try investing it in something risky or they would take it away from you? It happens. That is, in fact, the explicit point of controlled inflation. The layman just doesn't realize it.
- eqdw 11y ago
  > It happens. That is, in fact, the explicit point of controlled inflation. Apple's cash is subject to the same effect
  - cheald 11y ago
    Not likely, because Apple's cash is invested elsewhere - they almost certainly don't have a giant iMattress in the back that they're stuffing it into. The "cash equivalents" listed in their financials are things like t-bills and short-term bonds which are, by their nature, inflation-mitigating. You lose value on liquid cash sitting around in a checking account equivalent to the rate of inflation (less interest, which is negligible); companies like Apple know this and keep most of their liquidity in inflation-hedged instruments rather than in checking accounts.
- sp332 11y ago
  Inflation is very low right now, so I guess the non-laymen aren't too worried about it.
  - cheald 11y ago
    A 2-3% yearly loss in purchasing power adds up; at current inflation levels, $10,000 that sits in a checking account will be worth the equivalent of $8800 today in 5 years. Losing ~20% of your banked value per decade that it sits uninvested is substantial. It'll be worse if inflation is higher.

_rpd 11y ago

If they really don't have a use for the money, they should pay it out to the shareholders as dividends.