An easy solution

A group of economists at the University of Massachusetts has reported that Corporate America is hoarding $3.6 trillion (yes trillion) in cash reserves. Since they are able to borrow the money from the Federal Reserve almost free, why not?

Of course, it's only prudent to keep a healthy level of cash reserves as a safety cushion. One of the problems in 2007 was that the reserves were only about $20 billion. These economists conclude that, even allowing for a massive safety cushion, at least $1.4 trillion could be quickly invested in loans that would stimulate jobs.

Here's their bottom line prediction:

By moving this excess into productive investments, 19 million jobs would be created over the next 3 years, bringing the unemployment down to 5%.

They say that getting the banks to do this would take both carrots and sticks from the government: a new round of government stimulus spending and a tax on the banks' excessive reserves. Neither is going to happen with the current stalemate in Congress.

To see such an obvious and easy solution at hand, and know that our dysfunctional political system precludes our doing it -- is very discouraging.

Ralph