Companies like Microsoft are raising billions of dollars by issuing bonds at ultra-low interest rates, but few of them are actually spending the money on new factories, equipment or jobs.
. . .
This situation underscores the limits of Washington policy makers’ power to stimulate the economy. The Federal Reserve has held official interest rates near zero for almost two years, which allows corporations to sell bonds with only slightly higher returns — even below 1 percent.

Sounds like a case of capital on strike, or planning is on-hold until opportunities emerge.

There is uncertainty, domestically and abroad. There is a backlash, warranted or not, against business, free enterprise, and capitalism.  How do businesspeople know that a factory, office, or some other permanent structure will not be seized by a hostile government or its allies?  The backlash against wealth creation is palpable.  Its evident in the tone in this article from which I’m quoting. 

As well, there is a backlash in the U.S. against opening factories overseas, even though that would benefit firms and employees at home.  Economic growth is faster in many places around the world than in the U.S.  Firms need to enter those markets if they are to continue growing.  The impact at home is that absent growth, firms must layoff employees and close some operations.

When businesspeople make a commitment, they need some assurance that it will be able to function and serve its purpose — whether that’s making something or housing office workers.  Right now, that assurance is not present.

Also, there is an implication in the article that firms are supposed to issue debt to hire employees.  It is not, unless its part of a project that has an end to it.  Ongoing salaries and expenses need to be paid out of operating cash flow.  The analogy for the implication is like a family using their credit card to pay for living expenses and not paying off the debt by the next bill.

There is a cost to offering bonds; the interest payments.  Businesspeople must have some concrete objectives with which to deploy that capital so they can make the required return, which is over and above the cost.

Some businesspeople are re-financing their existing debt to lower interest debt, similar to a family re-financing their mortgage.  That, as with a family, increases cash flow.

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