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Comment by sp332 | Hacker News Reader

When someone sells you something, and you pay them money for it, why does it bother you if they don't spend the money? How would you feel if the government told you, in this awful economy, that you had too much money sitting around and should try investing it in something risky or they would take it away from you?

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> How would you feel if the government told you, in this awful economy, that you had too much money sitting around and should try investing it in something risky or they would take it away from you?

It happens. That is, in fact, the explicit point of controlled inflation. The layman just doesn't realize it.

> It happens. That is, in fact, the explicit point of controlled inflation.

Apple's cash is subject to the same effect

Not likely, because Apple's cash is invested elsewhere - they almost certainly don't have a giant iMattress in the back that they're stuffing it into. The "cash equivalents" listed in their financials are things like t-bills and short-term bonds which are, by their nature, inflation-mitigating.

You lose value on liquid cash sitting around in a checking account equivalent to the rate of inflation (less interest, which is negligible); companies like Apple know this and keep most of their liquidity in inflation-hedged instruments rather than in checking accounts.

Inflation is very low right now, so I guess the non-laymen aren't too worried about it.

A 2-3% yearly loss in purchasing power adds up; at current inflation levels, $10,000 that sits in a checking account will be worth the equivalent of $8800 today in 5 years. Losing ~20% of your banked value per decade that it sits uninvested is substantial. It'll be worse if inflation is higher.

@castratikron is right: scale matters. The local government doesn't care if I have a small barbecue, but if I set my own house on fire, it's a problem for them. Ultimately an economy depends on money flowing around; it has no intrinsic value, its economic significance lies in the productive assets left behind in its passing: a factory, an app, a road.

Leaving aside the fact that the economy is booming for wealthy companies like Apple, how Apple 'feels' is irrelevant. You're anthropomorphizing. It's a corporation, it doesn't feel anything (like for example, shame or compassion, emotions which can govern human behavior even without explicit regulation). Corporations have to be operated in the public interest---that's their whole original premise, though it seems most people have forgotten it.

What's something Apple could spend their money on that's not worse than leaving it in a bank?

That's a good question, and the answer might very well be 'nothing'. But we shouldn't be afraid to ask the question. Apple owes a duty to operate in the public interest, above and beyond its immediate obligation to its shareholders.

If Apple's cash is repatriated to the US it is subject to tax. Everyone agrees on that.

However Apple has found a way to repatriate the money without paying tax whilst still claiming its money is offshore.

Look up 'Braeburn Hedge Fund' based in Nevada. They manage Apple's money by way of shell corporations and invest the cash in US stocks, bonds and other financial instruments.

The law should be tightened so that this kind of scenario is not allowed. Tricky to do but surely some clever lawyer can figure it out.

Can your analogy really scale to hundreds of billions of dollars?

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