Apple Inc. (Nasdaq: AAPL) has more cash than the government of the Unites States.
According to the tech giant’s most recent financial results, Steve Jobs and co. have about $76.4 billion in cash reserves. By comparison, data from U.S. Treasury Department indicates that the federal government currently has an operating cash balance of $73.7 billion.
Meanwhile, the U.S. Congress will vote on a proposal to increase the government’s debt ceiling – currently at $14.3 trillion -- which would allow it to borrow more money to satisfy spending plans.
There is much anxiety that if the government fails to extend the current limit of $14.3 trillion, it could find itself struggling to make payments, and risk the loss of its blue-chip AAA credit rating.
There is a historical precedence for this, however.
According to The Los Angeles Times, following the financial panic of 1893, the U.S. Treasury was at risk of going bankrupt as investors sought to collect what they were owed from U.S. gold reserves. Then, New York financier J.P. Morgan (the most prominent corporate executive of his day) came to the rescue – by pledging $60 million in gold (about $1.5 billion today’s money).
As for Apple, it keeps raking in mountains of cash from sales of its wildly popular products, including iPads and iPhones.
It is holding more money is reserve that any other U.S. corporation – speculation is that it will have to redeploy this cash into making some aggressive acquisitions.
Apple’s cash pile has skyrocketed since late 2005, when it had less than $10-billion in reserve.
On the other hand, many U.S. companies may be holding onto their cash positions as long as possible until they see some definite signs that the economy is actually rebounding.