Big Business is hoarding their cash!
The stock market keeps hitting record highs, but big businesses aren't putting those profits back into our economy. A recent article in the New York Times said that corporate investment still hasn't bounced back to precrisis levels, let along made up for the lost ground from the record lows of 2009. If firms would invest at the same levels that they did during the previous decade, they could boost our economy by about $220 billion dollars annually, and possibly create another two million jobs.
When a business buys a new piece of equipment, they immediately provide more income to the manufacturer. However, they also make it easier for that manufacturer to hire more workers, and they make their own employees more productive. That single purchase has a ripple effect throughout our economy, but it doesn't happen when corporations hoard their cash. According to the New York Times, there is little incentive to purchase new equipment to improve productivity when businesses can easily get more cheap labor. As wages go up and fewer people are looking for jobs, that new equipment starts to look like a better deal.
Congress has the ability to encourage this investment through tax policy, but many of our lawmakers have no real interest in stimulating the economy. Republicans think slow growth and high unemployment are a great excuse to cut taxes, despite the fact that lower rates have never given us the economic boost that they predicted. In fact, we need to do the exact opposite to fix this problem. We need a progressive tax system that encourages investments over dividends. Let's take our economy back, and force big business to put the needs of our nation ahead of corporate greed.