Mike Masnick writes:
It seems that there’s a fun, but stupid, game that the press has picked up on in this whole debt ceiling debate (egged on by some in the government) that, thanks to the debt ceiling, Apple has more cash than the US government. As we get closer to the debt ceiling cut off, other mile markers are being highlighted as well, including the claim that Bill Gates has more money than the US government.
This is wrong. And it is stupid. Please stop repeating it.
The US government can print cash. It does not run out of cash. The numbers being talked about concerning the debt ceiling represent an artificial limit, set by the government, on how much the US can borrow (debt) in order to finance its operations (set in a budget by the federal government itself). What the Apple comparison treats as government “cash” is just the difference between what the government is (artificially) permitted to borrow and what it has borrowed already.
This is an important point, and I’m glad Mike made it. But I’d like to add something that might be stupid but that isn’t exactly wrong: Apple has a huge hoard of cash because it has persuaded customers to buy its products at prices higher than the cost of manufacturing, branding, and shipping them. When the federal government has a surplus, it is because the federal government makes us pay more in taxes than it costs to provide the services that lawmakers at some point in the past decided it should provide. Apple couldn’t make its bundle in the absence of the legal and physical infrastructure that the federal government provides, and I assume that a panoply of other government programs have helped fatten Apple’s bottom line, e.g., transfer payments, public investment in education and research, etc. A sufficiently expansive and optimistic interpretation of government spending could lead us towards all kinds of amusing conclusions.
All that said, I can’t help but look more favorably on how Apple raises revenue than how governments do it. Chalk it up to ingrained instinct.