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7/16/10

US economy - Corporations: Stop Hoarding!


The American growth engine is starving for fuel. Political support for further government pump-priming has drained away. Consumers are tapped out. And exports will never come close to providing the needed economic boost.

Only corporations have the money to sustain today's fragile economic recovery. By the end of this year, American businesses will have amassed half a trillion dollars in savings. But they are disinclined to spend it.
Getting corporate leaders to act like capitalists, not Scrooges -- to invest rather than save -- is the nation's most pressing economic challenge. 

If the country is to avoid looming economic stagnation, the government may need to use the threat of tax sticks and the enticement of investment carrots to get corporations to begin to take risks again and pledge their assets to America's future. "The corporate reinvestment process has broken down," said Rob Parenteau, the head of a global financial advisory firm. "And when that happens, growth is short-circuited."


For more: National Journal Magazine - Corporations: Stop Hoarding!

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