Posted on 09/06/2010 3:01:59 PM PDT by justsaynomore
According to the Federal Reserve, businesses are hoarding about $1.8 trillion in cash. There are three reasons for that phenomenon. It’s their money. It’s their money. And it’s their money.
It’s their money to pay down debt. It’s their money to pay dividends to their stockholders. It’s their money to make an acquisition, or save some reserves in case the economy gets worse. In all likelihood the economy is going to get worse.
It’s also their money to burn at the company picnic if they choose.
But the White House and liberals want businesses to just spend it to create jobs to help mask the failed economic policies of this administration and Democrat-controlled Congress. A Washington Post article by Jia Lynn Yang on July 15, 2010 was titled “Companies pile up cash but remain hesitant to add jobs”.
Hesitant? How about no way in this environment of uncertainty!
The likelihood of tax increases, more federal spending of money we do not have, banks tightening their lending requirements, the continued housing and construction crises, the unfolding negative effects of the forced health care bill, the threat of more anti-business legislation, national security threats and a persistently stalled economy encourages uncertainty and discourages economic growth.
Unlike government, businesses spend money to make money instead of creating jobs they do not need or ones that are too risky. It’s called good business.
Last Friday, the Labor Department reported that the unemployment rate for August 2010 was 9.6 percent. This is an added indication that economic and spending policies are not working, and that businesses would rather sit on their cash than spend it recklessly.
Commenting on this latest bad economic news, the president said “We are confident we are headed in the right direction.” Maybe he has forgotten that unemployment went up after passage of the non-stimulus spending bill and has remained high ever since. Or maybe he hopes voters will forget.
To repeat myself and the sentiment of many others, the president, his administration and most members of Congress still don’t get it, and they are certainly not listening to any ideas other than their own. You stimulate the creation of jobs by reducing an employer’s cost to keep people employed (less taxes), and by reducing the cost of a business to grow their business (fewer regulations), and then leave taxes low and cease the regulatory onslaught on American businesses (more certainty). If these things happen, then the economy will grow and jobs will be created.
Job creation is not a complicated phenomenon, but the president and the Democrats have been convinced that less taxes is bad, and more regulations are good. It’s just the opposite and there is plenty of historical evidence to prove it.
During the president’s State of the Union address, he restated his commitment to job creation. When the Economic Report of the President was released last February, he restated his commitment to job creation. Last week when the president gave his speech on the U.S. withdrawal from Iraq, he restated again his commitment again to stimulating economic growth.
Mr. President, businesses are not going to start spending their hard-earned cash on business expansion based on speeches and promises. That’s not hoarding cash. It’s just good business.
Businesses and businessmen are “hoarding” money, our money, for good reasons. I’ve “gone Galt” for political and moral reasons until we get a real American in our White House, someone who respects private property and the Constitution. Others are simply being cautious, avoiding the uncertainty of the lawless Obama Regime, which has publicly and openly voided contracts (example: bankruptcy law for GM/Chrysler) to give corporate property to his supporters. There is nothing the regime can do about us refusing to play their crooked game, short of coming for our property with guns. If they want my money, they are welcome to try, but I swore never again, for as long as I live, to give in to a union thug. If they want my money, the classic answer applies: Molon Labe.
Please add me to your ping list.
I only say that because my husband and I are small business owners - there’s no extra cash around here :) We do find we are not spending on things that aren’t essential.
Done!
We learned our lesson from O’Boozer.
We will never hire anyone again, after two years of doing all ourselves we will not be hiring again. We will stay lean and mean.
I know little about economics but I think it’s fairly plain that businesses whether hoarding cash or just being afraid to spend is prudent, unlike Democrats. Obama and his thugs have thrown money around, money that we don’t have that’s indebting taxpayers for many years and so far it isn’t working.
Well I’m just a person, but I’M “hoarding cash”, since I don’t know WTF will happen with the stock market and 401k’s until we “take the keys away” from the Dims, as Bambi would say. And many of the RINOs are no better.
Employees breaking probation and going back to jail :)
Ya think? Ya think maybe folks have lost confidence because Trojan Marxists are in charge of the economy? Ya think maybe the natural reaction to redistributionists trying to claw wealth away from earners for “redistribution” to non-earners would be for the earners to hunker down and try preventing their wealth from being “redistributed”? You know, hunker down, as in not loaning money, not borrowing money, not spending money, not taking risks, not hiring, and not investing. You know, like simply performing no financial transactions at all, since not transacting is the simplest way to keep your wealth from being clawed away and redistributed.
It’s simple, actually. Wealth is extracted from the wealth-creators by the leftist wealth-takers when money flows from one place to another, that is, when a financial transaction occurs. The takers have inserted various money-snatching filters in those money flows, and while stealing a little bit doesn’t hurt too badly, when the money-snatching begins to siphon so much money that a net loss of wealth occurs rather than a net gain, then it’s necessary to shut the spigots.
You can visualize a financial transaction as water flowing in a pipe and taxation as a tap the government installs to steal some of the water. The wealth creators open the spigot and some of their wealth flows down the pipe, say, to sprinkle on a field in order to grow some new factories that employ people and produce goods they can buy with their earnings. Suppose 1000 gallons goes in one end, and the government steals 100 gallons from its tap and gives away gallon jugs to buy votes with or whatever. The remaining 900 gallons end up helping the new factories grow, people are employed, goods are manufactured, and wealth increases for everyone involved. In other words, the economy continues to function.
Now suppose the government steals 400 gallons to “redistribute” and only 600 gallons get through to grow the new factories. Well, the factories fail to grow, and the wealth creators say, “This isn’t working, the heck with this”, and they close the spigot. Now there’s no new factories, and the government gets nothing either. You know, pretty much like the economy we see today under the helm of the Obammunist redistributionists.
Basically, this is simply a modern version of Aesop’s fable, “The Goose That Laid the Golden Eggs”. The Trojan Marxists currently in charge of the economy are busily eviscerating the goose to reach those last hard-to-reach golden eggs in order to slice them up and “redistribute” them. It’s no wonder the golden egg supply has dried up, now is it?
I for one am not hoarding cash. Cash is worthless to me. I hoard wealth.
Been spending all the free cash I have been able to accumulate for the past 11 years on gold and silver coins. Real honest wealth.
Doing my part to cause a shortage of the metals on the market to spur demand and provide jobs to the evil capitalist mining companies that claw the raw material from the bowels of the earth to make modern society function. If it weren’t for the mining companies there wouldn’t be any cell-phones, wind powered turbines, or drill rigs to dig wells for oil.
Did I use the wrong word?
I think I meant ATTRITION although the words don’t even sound alike.
Heh. And I consider myself a bit of a wordsmith.
;)
I knew what you meant, just busting your chops... I do check out you blog on a regular basis :)
Well God Bless you.
I knew you was joshing me but you were right. and you’re explanation was a smile.
I took no offense.
;)...Happy Labor Day.
Even if they did come out and admit it...the despicable idiot leftists that support them would still follow them blindly over the proverbial cliff we're headed for. The term Stuck-On-Stupid doesn't even begin to describe the type of "people" we're up against. They're also bound, determined and intent on getting their leftist way and fulfilling their leftist dream. Even at the expense of everyone in America.
The people we're up against are also inherently dishonest and dangerous in their sublime stupidity. We must defeat them at all costs, with whatever it takes and by any means necessary.
Businesses don’t spend money for the hell of it, they expect it to be an investment that will yield a return large enough to pay back the investment in 2-3 years. At this time, there is no point in spending it on either labor or expanded facilities because existing capacity is currently underutilized in most areas because of the economic slowdown, and likely to stay that way for the foreseeable future.
Related article:
The devastating result of ‘uncertainty’
Chris Woodward - OneNewsNow - 8/24/2010 6:00:00 AM
It doesn’t take much to understand America’s economic problems and why those problems continue — or so says one radio personality.
Conservative radio commentator Herman Cain says the policies of the Obama administration can be summed up in one word — uncertainty. That, he argues, is why the economy is in the shape it is in.
“Uncertainty causes businesses to instead of focusing on growth, they’re focusing on survival,” he stated Monday on the American Family Radio program Today’s Issues. “That’s why no jobs are being created.”
Cain claims the uncertainty is due in part to Cabinet members and other White House staffers lacking experience in the real world.
“[Only] seven percent of everybody in the Obama administration has had a job outside of academia or outside of politics and government,” he lamented. “They have not lived in the real world! They don’t know how to solve a problem.”
The conservative commentator says it is up to voters to get the U.S. back on track — and back to its roots. “This country was founded upon biblical principles. But some people are trying to take that out of our culture,” he observed. “We simply are not going to let that happen.”
Hermain Cain’s radio program can be heard every Thursday morning on American Family Radio.
http://www.onenewsnow.com/Politics/Default.aspx?id=1133044
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