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Capitol Report: The bad news for the economy is also good news

There isn’t much in Washington, D.C. that gets bipartisan support, but one is that companies need to invest more.

It’s the reason Republicans like — and passed — tax cuts, and it’s why Democrats want to limit — if not outright end — stock buybacks.

But there’s a benefit to stingy corporate investment as the current economic expansion gets long in the tooth. This is now the second-longest post-war expansion, and business cycles often go “bust” due to overinvestment. But that’s not happening this time.

“This is a two-edged sword: sluggish investment deprives businesses of productivity-enhancing physical capital, but if investment does not boom it may also not bust,” point out analysts at Credit Suisse.

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