From your own article...pointing out that corporate debt has grown even faster than the 'piles of cash'.
Outstripping even the cash growth, however, was the growth of outstanding debts.
"The $1.8 trillion in cash is dwarfed by the $5.8 trillion in total debt outstanding, which increased 6x to that of cash during 2014 as borrowers of all stripes took advantage of the low borrowing cost and investors' thirst for yield," Chang said.
Yes, but whose debt is this? Is private or public or both? They don't say, but I suspect both, IOW federal deficits are too high.
Public debt is a lesser concern, though that won't stop WS from using it as a blunt weapon.
That article was about corporate debt. Those numbers were in line with other numbers I have seen for corporate debt. US federal debt is a little over $18 trillion, though FY 2015's deficit was said to be down to $439 billion, which isn't really bad, if we weren't 5-6 years into a 'recovery'.
But the ZIPR policies have made sure that far too many people feel compelled to put their savings into riskier investments trying to get some return for their money. Lots of retired boomers are out there (like my parents) that have seen their safe income dwindle with ZIPR rates.
There are many things the govt and Federal Reserve could have done to help people more so than WS. Keeping ZIPR rates for years on end isn't one of them. Congress could have allowed the FR to buy up all the student loan debt with their created money instead/in-addition-to of MBSs and treasury notes. Then they could have reset the loan interest to 1%. Nope....need to stick to the half dozen ways of funneling money at WS...
The risky investment argument is the only one I've seen that's at all persuasive. But it's not enough, considering the state of labor and wages.
Another idea was a payroll tax holiday. More people could've stayed in their homes, the MBS wouldn't been safer. But no, top down solutions are the only ones under consideration.
My point is more about the ZIPR rates really haven't been effective for several years now; and if anything are hurting other people, encouraging more risk, and encouraging poor debt choices. There are policies that could help labor and wages far more than ZIPR, but those are off the table. A few ideas:
* Require employers to pay H1B visa workers 120-140% of the median wages for said categories, if they really want those 'rocket scientists' instead of the several hundred thousand of cheap technology/engineering labor they are bringing in. The net result would be a probable 90% drop in H1B corporate requests.
* We could have not built a $13 billion new military base in S. Korea, but instead built a $13 billion base near Detroit and stationed the 30,000 soldier there.
* We could have wound down the Afghan adventures years ago (but continued say $10 billion a year in aid for...well...fuck...forever as long as there was some semblance of a non-hostile govt there) and poured the remaining $90 billion into US infrastructure each year.
* We could have let the Shrub's tax breaks for investments die a clean death.
* We could have removed the cap on wages subjected to FICA taxes, but exempted the first $5,000 of W-2 income from FICA taxes.
