There was a couple of interesting quotes in a New York Times Business Section article last week:
1) “Companies are holding back on spending even though they have built cash reserves to 6 percent of their total assets, the highest level since 1952, according to Credit Suisse.
2) “The proportion of United States’ companies cash flow being spent on new equipment and other investments has not rebounded since the financial crisis and is stuck at the lowest level since the late 1950s, again according to Credit Suisse.
The New York Times is notorious for advocating a consistently liberal or left-wing bias - even in the Business Section. But in this case, they are dead-on correct about picking on the Republican drum-beat of tax cuts.
Why cut taxes? Answer - so investors (and consumers) can use the money to stimulate the economy in a more efficient manner than the government.
Hey, guess what? As these quotes show - giving the money to businesses isn't going to do any good at this time. It is only going straight to their bank accounts to earn .001% interest.
A consistent tax policy is ultimately the wrong policy at some point in time. Economies change through the years - back and forth from good to bad (and even mediocre).
