The myth of corporate cash hoarding

posted by
February 23, 2011
Cato Institute
by Alan Reynolds  
Posted in Commentary

"American nonfinancial corporations were 'sitting on' $1.93 trillion in liquid assets at the end of last year's third quarter, according to the Federal Reserve Board. This has become one of the most frequently echoed statistics, viewed as indisputable evidence that U.S. business leaders are unduly timid or evil. ... Like so many statistics used to score political points, this datum de jour has been totally misunderstood. The chorus of media outrage about supposedly excessive corporate cash reveals nothing about the financial health of any U.S. business. It simply reveals appalling ignorance of elementary accounting." (02/23/11)

http://www.cato.org/pub_display.php?pub_id=12809  

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