No No No, it's the consumers' fault

[d-ray657]

So the reason employers are sitting on mountains of cash from high profits instead of hiring is that they don't trust consumers to spend enough. It's not enough that consumers are scared to death that they are going to be among the 9.5% who don't have jobs, consumers are actually looking to reduce their debt. People aren't spending enough money because the the unemployment is high, and companies aren't hiring because they don't think consumers will spend enough. "As long as we're getting richer, why worry about bringing anyone else in to share in the success."

So what are companies doing - buying machines that replace humans; hoarding their cash, and arguing that letting the Bush tax cuts expire would be unfair to corporate executives.

Now to be consistent, I need to acknowledge that one thing holding back the employers from hiring is that people are starting to do what I have argued they should do. They are making do more with what they have, consuming fewer resources, and reducing debt. Granted reduction of debt slows consumer spending, but as the consumers' debt load decreases, they will eventually have more available cash.

I think one reason employers are enjoying such cash accumulation is that corporate taxes are far too low. If they have benefited so greatly from the government investment in the economy, they should share some of the benefit by helping address the budget deficit. But if that happened, someone making a million dollars a year would have to scrape by on 600 grand. The companies might just be able to put 700 million in the bank instead of a billion. That must be too much of a hardship to bear.

Regards,

D-Ray