I’ll start by following up on a post Tars made about the debt ceiling because the fun isn’t over! The ceiling is going to be hit again on the 16th (according to a letter Timmy Geithner sent to congress). If you weren’t sure that this was all completely cynical, even Chamber of Commerce is getting nervous now. Still, the whole dysfunctional government that responds only to cash thing leaves us with a political problem. It looks like Boehner doesn’t have control of the GOP caucus and all of the freshmen that came in on a wave of campaign contributions from the financial sector believe they’ll lose in next year’s primaries if they don’t vote against raising it.
With all of this going on in the background, the “Freedom to Invest Act of 2011” has been introduced in the House. If you’re wondering how corporate America could possibly get more investment freedoms, it’s because they want to bring the money they have in tax havens back to the U.S. They claim that if they’re allowed to do so, they’ll invest. This is a blatant lie.
Doug Henwood quotes the Financial Times, saying that they’re spending it on buy-backs:
The rise in buy-backs and deals marks a turning point in the credit cycle, as companies become more willing to invest their cash and borrow more money. Since the 2008 financial crisis, many companies have been hoarding cash and building up ever greater treasure chests and rainy-day funds.
This is exactly what they did the last time they were given a tax break to “repatriate” earnings held offshore. For the repeat, they’ve created a hilarious little website (I found it on the Adobe blog) to promote the idea, complete with a picture of blue-collar workers at the top. The slogan, “Let’s invest the money here at home–not spend it overseas,” is beautiful because it was earned overseas in the first place, which is why it’s in a tax haven.