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BI: Apple has more cash on hand than the U.S. government

updated 11:00 pm EDT, Thu July 28, 2011

Statistic used to highlight debt crisis

As pointed out by several publications, as of yesterday Apple -- the world's most valuable technology company -- has more cash and marketable securities on hand than the federal government does, according to the U.S. Treasury's own daily statement. At the end of June, the iPad and Mac maker had $76.2 billion on hand, while the government currently has $73.8 billion in operating cash balance.

Business Insider's pithy addition to the disturbing statistic, meant to highlight the ongoing debt-ceiling crisis, explains that Apple has more money on hand because it "collects more than it spends, while the U.S. government does not." Of course, this ignores the reality that governments are not encouraged to hoard capital, and that companies are generally not allowed to operate at a deficit for prolonged periods.

The potential downgrading of the government's credit rating, one of several possible outcomes if the crisis is not resolved before August 2nd, would make borrowing more difficult for the government, its agencies, and drive up interest rates on consumer loans as well as tax burdens on most individuals -- further damaging an already-struggling economy. Just as when consumers miss credit payments, the government would be forced to re-allocate resources to pay a significantly increased interest rate on the public debt, which could trigger another Wall Street-led financial collapse and throw the country further back into recession.

The effect of an increased interest rate on the debt -- which is a different issue than the year-to-year deficits -- would increase tax burdens on all Americans for many years to come.

In its most recent financial reports from its fiscal third quarter, Apple reported that it paid a tax rate of 23.5 percent. Apple is one of several large companies calling for a one-time "tax holiday" on overseas profits that would offer corporations a reduction (from 35 percent to just five percent) on the amount of taxes paid when re-patriating profits back into the United States that were made on foreign sales.

The argument is that infusing the U.S. economy with the billions currently kept overseas would result in both stimulative and job-creation effects on the economy; however, opponents, who have occasionally targeted Apple with protests over its membership in the anti-tax coalition, argue that it would cheat the U.S. government of rightful revenue and would further cripple the government during the current budgetary crisis. [via BusinessInsider, photo by Jeff Sandquist via Flickr]






by MacNN Staff

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Comments

  1. Roehlstation

    Joined: Dec 1969

    +12

    Meh....

    I have more cash on hand than the US government.

  1. MyRightEye

    Joined: Dec 1969

    +3

    EVERYONE

    ... that is not 15 Trillion $ in debt has more cash than the US Govt.

  1. Jonathan-Tanya

    Joined: Dec 1969

    +3

    China, India, Russia

    China, India, Russia have huge cash reservers.
    C
    hina has a 1.2 trillion cash reserve - Russias was about 500 billion, although I don't know where it stands today.

    If nobody has any money, then just how are they going to loan us 1.5 trillion per year?

    The answer is - they can't. There isn't enough money in the world to loan us, at the rate we are going.

    We are actually going to be borrowing money from ourselves, printed by fiat from our own treasury.

    Well - lets not get into it, lets enjoy the ride while it lasts.

    Thanks for your political opinions Macnn. ....why not.

    Comment buried. Show
  1. imNat-imadouche

    Joined: Dec 1969

    -21

    Apple has more...

    ...bullshit to say to consumers than the US Government

  1. MyRightEye

    Joined: Dec 1969

    +4

    Jonathan

    The treasury does not create money - they borrow it, at interest, from the Fed.

  1. MyRightEye

    Joined: Dec 1969

    0

    Jonathan

    The treasury does not create money - they borrow it, at interest, from the Fed.

  1. guzzi

    Joined: Dec 1969

    -7

    Washington take a hint.

    They pay 23.6%in taxes that's just about right, but what is the drum beat?......Make the rich and the corporations pay more...what does that do? It makes them pull their $$$ out of the US.....DUH! The Government wants to grab $$$ that doesn't belong to them and give it to other people...WHY? FOR VOTES. Try getting a free computer out of Apple for a charity....HA HA HA I've tried...Apple doesn't give away free computers, software...or any things else.....We are a capitalistic society not the USSR WHICH FAILED.... Thanks MNN for pointing this out.....I wish I could read minds now and could see what the President was thinking when he sat down to dinner with all these tech Million and billionaires. I wonder how many shares of Apple stock Mr. Obama has?

  1. Hillbilly Geek

    Joined: Dec 1969

    -6

    You and I create money--

    --that is, we create value. The gummint only sucks.

  1. Hillbilly Geek

    Joined: Dec 1969

    -6

    when you think about it,

    the government only prints money. And it has to pay people and buy supplies to do it. So it can't even make money when it makes money. Inception!!!

  1. macmediausa

    Joined: Dec 1969

    +6

    Tax holiday???

    If companies like Apple are claiming the Tax holiday would allow companies would result in the money being used for job creation and stimulation of the economy, then why doesn't Apple use some of the 76 billion they have already in doing it now? All the tax holiday would mean is that Apple would have 100 billion stashed away in the bank instead of 76 - maybe more bankers be employed.

    A tax holiday would mean that big corporations would have another loophole in legally avoiding normal taxes.

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