Apple Has 10 Percent of America's Corporate Cash

Moneybox
A blog about business and economics.
Jan. 22 2014 7:32 AM

Apple Has 10 Percent of America's Corporate Cash

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Yep, I've got the money right here in my socks.

Photo by ChinaFotoPress

A fair amount has been written, some of it by me, about the extraordinarily large volumes of cash that U.S. corporations have amassed due to a combination of weak investment and tax avoidance strategies. But as Richard Waters points out, this is hardly an across-the-board phenomenon. Instead, a handful of firms account for a huge share of the money:

By the middle of last year, the concentration of wealth in the hands of a few tech winners had left just six companies – Apple, Microsoft, Google, Cisco, Oracle and Qualcomm – with more than a quarter of the $1.5tn held by US non-financial corporations, according to rating agency Moody’s.
With nearly $150bn in its coffers, Apple alone was sitting on close to 10 per cent of corporate America’s cash.
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This is so much money that individual firms' decisions arguably become macroeconomically relevant. That Apple cash is about 1 percent of U.S. gross domestic product. Of course with many earnings coming from abroad these days you expect to see some detachment between firm decision-making and the state of the American domestic economy. But as a practical matter were this money to be spent a large share of it would likely be spent in North America.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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