Could Apple pull a J.P. Morgan and bail out the U.S. government?
Apple Inc. may not have more money than God. But it's got more cash than Uncle Sam.
As the government struggled to reach an agreement on raising the debt ceiling, the U.S. Treasury's cash balance fell to $74 billion this week. That's less than the $76 billion that Apple now has in cash.
It's not terribly likely that the government will ask Apple Chief Executive Steve Jobs for help. But it wouldn't be the first time the government has asked for a bailout from an industry mogul.
In the mid-1890s, with the U.S. economy still recovering from the financial panic of 1893, the U.S. Treasury was in danger of going bankrupt as worried investors clamored to collect what they were owed from U.S. gold reserves. With few options left, President Cleveland met with New York financier J.P. Morgan, who pledged a whopping $60 million in gold. Adjusted for inflation, that would be about $1.5 billion today.
"The fact that Morgan had become a cosigner on the federal debt was what impressed the markets," historian H.W. Brands wrote in his account "The Upside-Down Bailout." "Within days the Treasury's condition stabilized; within weeks the dollar's danger had passed."
-- David Sarno
Image: Apple CEO Steve Jobs. Credit: David Paul Morris / Bloomberg