It is a myth that American corporations are hoarding billions in cash instead of spending it to help the economy or create jobs, declares Forbes columnist Jeffrey Dorfman.

Dorfman, a University of Georgia economics professor, said U.S. companies are holding cash equal to about 13 percent of their annual revenue, not much higher than the long-term average of 10 percent.

“The dollar amount has risen from $800 billion to about $1.5 trillion in the last eight years, which seems like a lot until you convert it to percent of revenue. Then that rise seems more minor,” he wrote.

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Dorfman said corporations’ capital spending has been rising steadily since the end of the recession and is at a record high of $868 billion, up from $598 billion in 2006 before the recession began.

“Some people wish that companies would use all that cash to hire more workers. However, companies hire workers not because they have cash on hand but because they think the new workers will help them earn more cash,” said Dorfman.

He noted only 20 companies account for 40 percent of all cash, which is estimated at $650 billion. And just four household tech names – Apple, Cisco, Google and Microsoft – account for $350 billion of that total.

Much of the tech giants’ cash is actually being held in overseas accounts, in part because if they bring it home to put into business expansion, much of it will be eaten up by U.S. corporate taxes instead. U.S. corporate taxes are now the highest in the developed world, according to the Organization for Economic Cooperation and Development (OECD).

“Of course, money never sits on the sidelines. If a corporation holds cash in a bank account, the bank will lend those dollars out to somebody else,” Dorfman said.

“That loan might be to a U.S. company or for an investment somewhere else in the world, but the money is not just sitting in a bank. Apple sometimes has more cash on its books than the U.S. government, but that is just accounting.”

One reason some corporations are holding a bit more cash than usual is because the Federal Reserve has throttled interest rates down to extraordinary lows for years in an effort to boost the uneven economy. That means companies can borrow cash cheaply, and then find a use for it later, Dorfman said.

“While the myth of corporate cash piles may be a convenient one for Democrats to tell as an explanation for why the economy has not performed better on their watch, it just doesn’t hold water. Businesses are doing the best they can under the poor national economic policies being forced upon them.”

Richard Lane, senior vice president at the Moody’s credit rating service, told Daily Finance that in 2013, total U.S. corporate debt actually rose $201 billion.

"Apples-to-apples, that means that over the past year at least, companies have increased their debt by a factor of six relative to cash growth," Lane said. He added "the increased debt reflects a very accommodative bond and loan market in 2013, with low overall costs and attractive terms for borrowers."

In fact, he estimated nonfinancial companies have piled up $4.8 trillion worth of debt owed to their lenders and bondholders.

According to Moody's data, American corporations may not in reality have much cash on hand at all. That’s because it estimates about $1.53 trillion in nonfinancial corporate debt matures over the next five years, which is a bit more than the $1.48 trillion in cash they've got on hand.

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