Are Corporate Cash balances too high?

A look at the over $2 trillion in cash at U.S. corporations has been an economic concern and debated about by politician's. Should the money be put to better productive use to spur domestic economic growth? 

First, a number of large multi-national corporations hold significant cash balances outside the United States. While the rules for a two year period were changed that offered corporation's tax advantages to bring the funds back to the United States, the plan did not work. The main reason is that major multi-national production facilities are now offshore and used in the normal cash flow cycle in the country of production.

The second issue is that the collective debt level of companies have surged to over $6 trillion from $2 trillion  few years ago.  In effect, management teams have decided to borrow funds instead of using cash to invest in productive assets. The cash on hand will now be needed to payoff creditors in case of a reduction in  demand.

While borrowing rates continue to be at record lows, many management teams are too concerned about end demand to enter new markets or acquire other companies to secure their competitive position.  Management teams appear to be building up a significant cash war chest to prevent any liquidity issues as leveraged companies find it more difficult to access the credit markets.