

U.S. balance now less than Apple cash - lacker
http://business.financialpost.com/2011/07/28/u-s-balance-now-less-than-apple-cash/

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shawnee_
There are only two things that a company can do with its profit:

1\. Invest the proceeds back into the company. 2\. Pay profits out to the
shareholders.

That is it.

These days, companies tend to do more of #1 and less of #2 -- they define
"investing the proceeds back into the company" as increasing the salaries /
benefits of the company's top executives.

Historically, the US government foresaw this problem of too much power in the
hands of too few people, both in the government itself, and in the private
sector.

When the Federal Income Tax was originally implemented it stated that all
businesses would be liable for taxes, and only the wealthiest people (read ==
the "moguls", back in the day) would be responsible for paying taxes
(<http://news.ycombinator.com/item?id=2783480>). Think about the underlying
brilliance of this plan: income taxes are tiered, based on profit (the more
you make, the more you pay). If a company was making excessive profit, it
could do one of two things to "decrease" the tax burden: hire more people, or
create a "market" for stocks that can reward the common Joe. The original
income tax laws laid out would have allowed a company to pay someone $100K (in
2011 dollars) tax-free. However, that $100K, if kept as "profit" for the
company would be subject to Corporate income tax.

(Q: Guess who voted NO on letting shareholders vote on executive compensation?
(Jul 2009)) Hint - <http://www.ontheissues.org/> ) (A: the speaker of the
House).

When shareholders aren't allowed to regulate their "ownership" of a company
(especially when it's just tiny percentage), they don't get a say on how those
profits are used, and executive salaries continue to bloat. Those at the top
whine, complain that they are the "job creators", and should not be subjected
to such taxation. But this is exactly what is supposed to happen: their
salaries would not be so high if the companies they controlled were not doing
so well. If they're doing well, they should be either hiring more people
(people with jobs would be less reliant on government assistance), OR
gradually increasing the well-being of shareholders by paying out dividends to
those who own only a tiny fraction of the company.

But, it's not working out like that. The checks and balances that the founding
fathers put into place to prevent the notion of absolute power corrupting
absolutely have become weighted down by the greed of a few.

~~~
dschobel
_If a company was making excessive profit..._

I don't recall ever seeing this concept of "excessive profit" in any of my
econ text books.

Must just have been my lousy books. Care to define it?

~~~
alecco
That's easy: Credit Default Swaps and investment executive bonuses.

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hugh3
Dude, _I_ have more cash on hand than the US Government.

~~~
hugh3
NB Not strictly speaking true, but ask me again next week.

(Also, my net worth is positive, whereas theirs is negative to the tune of
thirteen figures.)

~~~
aquark
Not exactly -- does the Federal govt even keep a balance sheet that shows
assets - liabilities?

How do you value the Federal assets? What's the going rate for a second hand
air craft carrier?

~~~
w1ntermute
> What's the going rate for a second hand air craft carrier?

Whatever an African dictator's willing to pay for it?

~~~
DrJokepu
More likely a European middle power that doesn't have the capacity to build
one. France has a single usable active aircraft carrier. The United Kingdom
has no usable aircraft carriers at the moment. HMS Invincible was
decommissioned years ago, HMS Illustrious was modified recently so that it can
only handle helicopters and Harriers except that Harriers have been
decommissioned and all the helicopters are busy in Afghanistan. HMS Ark Royal
has been decommissioned. HMS Queen Elizabeth won't be ready before 2020.
Germany has no aircraft carrier.

The problems caused by the lack of aircraft carriers in Europe were clearly
demonstrated during the recent conflict in Libya. I wouldn't be surprised at
all if one of the European countries would be interested in purchasing or
leasing a carrier. The United States would obviously never sell such a ship to
a random third world dictator but I don't see why wouldn't they sell it to one
of their allies.

~~~
w1ntermute
> The United States would obviously never sell such a ship to a random third
> world dictator

You might be surprised by the lengths that the United States (covertly) goes
to to please third world dictators in its quest for global hegemony.

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charlesju
The United States government does not need cash on hand. It can just make
money out of thin air. It's called quantitative easing.

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xradionut
Who needs cash when you have large numbers of nuclear weapons for leverage?

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davidedicillo
I wonder what would happen if a country like U.S. would say "Ok, we failed, f
__k democracy, from tomorrow we hire Steve Jobs (or any CEO of that caliber
like Jeff Bezos) to run the country. Senate and House can go home, we don't
need them."

~~~
Cushman
It'd be nothing new.

<http://en.wikipedia.org/wiki/Julius_Caesar>

Edit: That article has a few appropriate quotes, actually.

 _During his early career, Caesar had seen how chaotic and dysfunctional the
Roman Republic had become. The republican machinery had broken down under the
weight of imperialism, the central government had become powerless, the
provinces had been transformed into independent principalities under the
absolute control of their governors, and the army had replaced the
constitution as the means of accomplishing political goals. With a weak
central government, political corruption had spiraled out of control, and the
status quo had been maintained by a corrupt aristocracy, which saw no need to
change a system that had made its members rich._

~~~
gte910h
This actually had been done a couple times before. The person who actually did
it most completely was not Caesar, but instead Sulla (the generation before
Caesar).

<http://en.wikipedia.org/wiki/Lucius_Cornelius_Sulla>

They were called the Cornealian Laws.

[http://en.wikipedia.org/wiki/Lucius_Cornelius_Sulla#Dictator...](http://en.wikipedia.org/wiki/Lucius_Cornelius_Sulla#Dictatorship_and_Constitutional_Reforms)

[http://en.wikipedia.org/wiki/Constitutional_Reforms_of_Luciu...](http://en.wikipedia.org/wiki/Constitutional_Reforms_of_Lucius_Cornelius_Sulla)

Caesar did similar things, but in the other direction, and less like the guy
specified.

~~~
Cushman
It certainly has a rich tradition!

Although I don't think it's accurate to say Sulla took power more completely
than Caesar did... Remember that Dictator was an actual office in the
Republic, normally time limited, and that Sulla voluntarily resigned the post
where Caesar took it all the way to Dictator for Life.

~~~
gte910h
He didn't do really the same thing at all: I just think he did more of a "Yo
Steve, go Run this Country" sort of thing. Also Sulla's dictatorial term was
notably NOT time limited.

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dfischer
Apple is killing it. It's insane how much money they're making now. Not only
that, I think they're half valued.

