As of the end of the 2nd Quarter 2010, US companies are sitting on $1.8 trillion in cash and short-term assets. This amount of money is mind-boggling and is sitting idle while the US government and Federal Reserve consider further action to stimulate the economy. I know something that would stimulate the US and global economy … if those companies started spending or investing that cash they are getting no return on!
Why doesn’t some bright spark in the US government contact the biggest of these companies and encourage them to invest (you could even give them some tax breaks in return for investing at a time of hardship)? It makes no sense for companies to hoard cash like this … some even predict that they will overpay for acquisitions as a result of the inevitable over-eagerness to spend once the recovery looks secure. Just 10% of these funds would make a significant impact on the economy and employment in general, helping creating confidence and inspiring innovation.
We need some Buffett common sense here: “Be fearful when others a greedy and greedy when others are fearful”