It came through the news feed yesterday morning. it said:
Here’s a company, a technology challenger against the domineering IBM’s, HP’s and Dell’s of the world, that for most of its history was written off as being just a month or two away from going bankrupt. Now Apple has more money sitting in the bank than the US Government - $76.2B (AAPL) as opposed to $73.8B (US). Impressive.
The cash reserves in the national treasury is actually just a portion of the national balance sheet. If they had to, for instance, the federal government can conduct a fire-sale and get rid of federal assets (i.e. buildings, land, equipment etc) to raise substantial amounts of cash and replenish the cash on deposit. But a fire-sale almost necessarily means not getting top dollar for what might very well be invaluable national treasures.
One side of this picture also points to the run-away spending culture pervasive in Washington that has proven difficult to control. And because the US Congress holds the purse-strings for the national money-bag, we can safely say they are, in large measure, responsible for this crisis. Instead of ratcheting down on the spending the government has found a way to spend more than it actually brings in. This nation has a revenue challenge because of unusually high levels of unemployment sustained over a period of time. What that means is that companies are not generating enough profits to sustain their operations, requiring them to deploy cash-saving measures including handing their employees the pink slip.
Sometimes borrowing is the solution, if only temporarily, on the understanding that revenues will return as demand increases. But even Thomas Jefferson understood the dangers of borrowing that he wished there was a way to completely remove the possibility of borrowing by the federal government. He said:
TO PROVIDE FOR THE US’ BORROWING NEEDS UNTIL 2013
1st Phase: Increase budget by $400 Billion immediately
2nd Phase: Increase budget by another $500 Billion after September
3rd Phase: Increase budget by $1.2 Trillion - $1.5 Trillion
If passed, the debt ceiling will increase between $2.1T and $2.4T
Now more than ever, we should revisit what Thomas Jefferson said about borrowing and consider a smart pay-as-you-go system that doesn’t stifle the engine for economic growth.
APPLE HAS MORE CASH THAN US GOV
TOP 15 CREDITORS THE US OWE MONEY TO
WHAT IS IT ABOUT THE DEBT CRISIS
APPLE NOW HAS MORE CASH THAN THE US GOVERNMENT.It was an article header from Business Insider. At first it was somewhat disturbing - diverting my attention so I can try to understand the implications. Then, I got a chance to digest it a little bit more and soon realized the humor of that quaint bit of news.
Here’s a company, a technology challenger against the domineering IBM’s, HP’s and Dell’s of the world, that for most of its history was written off as being just a month or two away from going bankrupt. Now Apple has more money sitting in the bank than the US Government - $76.2B (AAPL) as opposed to $73.8B (US). Impressive.
The cash reserves in the national treasury is actually just a portion of the national balance sheet. If they had to, for instance, the federal government can conduct a fire-sale and get rid of federal assets (i.e. buildings, land, equipment etc) to raise substantial amounts of cash and replenish the cash on deposit. But a fire-sale almost necessarily means not getting top dollar for what might very well be invaluable national treasures.
One side of this picture also points to the run-away spending culture pervasive in Washington that has proven difficult to control. And because the US Congress holds the purse-strings for the national money-bag, we can safely say they are, in large measure, responsible for this crisis. Instead of ratcheting down on the spending the government has found a way to spend more than it actually brings in. This nation has a revenue challenge because of unusually high levels of unemployment sustained over a period of time. What that means is that companies are not generating enough profits to sustain their operations, requiring them to deploy cash-saving measures including handing their employees the pink slip.
Sometimes borrowing is the solution, if only temporarily, on the understanding that revenues will return as demand increases. But even Thomas Jefferson understood the dangers of borrowing that he wished there was a way to completely remove the possibility of borrowing by the federal government. He said:
I wish it were possible to obtain a single amendment to our Constitution ... taking from the federal government the power of borrowing. (Thomas Jefferson, November 26, 1798)On the voting block for consideration by both parties is a graduated system that allows for the budget to be increased immediately and then some more over time if certain targets are achieved. There is considerable pressure at the moment because a vote needs to be passed by tomorrow, Tuesday. The proposal, if passed, will cover the Treasury’s borrowing needs through 2013. So far this is how it looks like:
TO PROVIDE FOR THE US’ BORROWING NEEDS UNTIL 2013
1st Phase: Increase budget by $400 Billion immediately
2nd Phase: Increase budget by another $500 Billion after September
3rd Phase: Increase budget by $1.2 Trillion - $1.5 Trillion
If passed, the debt ceiling will increase between $2.1T and $2.4T
Now more than ever, we should revisit what Thomas Jefferson said about borrowing and consider a smart pay-as-you-go system that doesn’t stifle the engine for economic growth.
APPLE HAS MORE CASH THAN US GOV
TOP 15 CREDITORS THE US OWE MONEY TO
WHAT IS IT ABOUT THE DEBT CRISIS
