Moody is apparently confirming to its customers that the Tax overhaul will have minimal impact on the economy because (as was predicted) the vast majority of businesses are prioritizing stock buy-backs, mergers and acquisitions, and paying down debt. (https://www.marketwatch.com/story/ta...ays-2018-01-25).
This was predicted. Prior to the tax overhaul for businesses, U.S. businesses were sitting on almost record holdings. That they would take the surplus cash and use it for things they were not doing with their existing holdings seemed unlikely, and Moody has confirmed this is their projection and what they are seeing in the market.
What we are seeing in the news is the usual case of select instances of businesses that ARE giving part of their gains to employees, but those gains are primarily being given in the form of one-time bonuses. That avoids the need to change payroll, and means that companies can elect NOT to give that bonus in future years and retain the surplus earnings.
As expected, raising salaries and adding jobs is not something a business seeks to do. Managers will tell you it is always the course of last resorts and is done only when a business has no additional room to squeeze efficiency enhancements, or is expecting increased demand beyond what they can meet with efficiency enhancements. When a business gets more money, they do not immediately think, "let's make more jobs."
This was predicted. Prior to the tax overhaul for businesses, U.S. businesses were sitting on almost record holdings. That they would take the surplus cash and use it for things they were not doing with their existing holdings seemed unlikely, and Moody has confirmed this is their projection and what they are seeing in the market.
What we are seeing in the news is the usual case of select instances of businesses that ARE giving part of their gains to employees, but those gains are primarily being given in the form of one-time bonuses. That avoids the need to change payroll, and means that companies can elect NOT to give that bonus in future years and retain the surplus earnings.
As expected, raising salaries and adding jobs is not something a business seeks to do. Managers will tell you it is always the course of last resorts and is done only when a business has no additional room to squeeze efficiency enhancements, or is expecting increased demand beyond what they can meet with efficiency enhancements. When a business gets more money, they do not immediately think, "let's make more jobs."
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