Interesting post at CNBC that reveals [Ed: as usual without adequate explanation but I digress] S&P 500 companies are on track to soon accumulate record amounts of "cash", excerpt:
Amid a lackluster earning season that has featured many companies missing sales expectations, cash balances have swelled 14 percent and are on track toward $1.5 trillion for the Standard & Poor's 500, according to JPMorgan.This is interesting in light of some recent discussions here at MNE about "savings" and "investment". These "cash" balances building up at these corporations represent simply the record of fulfilled savings desires by the managements of these companies and as are all types of "savings", are part of the ex post record of demand "leakage" or demand "destruction" in the economies that these companies operate in.
The fact that world economies continue to underperform with output and employment gaps is signaling that sectors outside of the non-government corporate sector (addressed here in the article), which are the non-government household and external sectors, continue to be denied enough "cash" balances by the government sector (fiscal deficits are too small) to satisfy the savings desires of these other sectors. As MMT (Warren) says: "Taxes are too high" for our given size of government.
This non-government corporate sector seems to remain in the first position as far as which sector is best enabled to satisfy savings desires with "cash" as the non-government household sector has to spend their income first on necessities such as gasoline, food, utilities, medical, etc (great portions of which go towards the revenues of these S&P companies); and can only satisfy their own savings desires with any balances or "cash" they have left over after the purchase of these necessities. Which I'm sure many households have no such balances in left over after spending on necessities under our current US fiscal policy.
So in this "muddle through" economy with too tight fiscal and the corresponding marginally positive growth, it can easily appear that the lower income demographic segment of the non-government household sector remains left with just the "scraps from the rich man's table". In this case, the "rich man" can appear to be mostly the non-government corporate sector who are in the best position to be able to save or retain a surplus of the "cash" that governments are making available. But the real problem remains these negligent morons we have occupying positions of authority in economic policy making who continue to refuse to provide the "cash" to satisfy all non-government savings desires.
