– By Nathan Slaughter Imagine a nearly $1 trillion stimulus package that wouldn't add one penny to the national debt, would give the economy traction, and actually raise tax revenues. I've found a simple way to do that, and if this plan is enacted, it would benefit every sector and nearly every company. It could be just the thing to put an end to the economic malaise. If enacted, shareholders of dozens — even hundreds — of companies would have to be ready for a tidal wave of stock buybacks and dividend hikes. And the overall boost to the economy? I think it would lead to billions of dollars in new investment and expansion, creating millions of jobs. It doesn't take much of a stretch to realize that would be a boon for the economy and would send the stock market soaring. In fact, Washington has done exactly what I'm proposing before — back in 2004. Back then, it added more than $300 billion to the economy, but I think it would be more than double that amount this time around. That's why I think of it as a $700 billion stimulus package — except that it wouldn't add one penny to the national debt. It almost sounds too good to be true, but I think everything I've just said could happen in the coming year. And all that has to happen is Congress needs to see the advantage of allowing companies to repatriate — bring back home to the United States — the cash they hold abroad to avoid U.S. taxes. Corporations are behind the move, unions are behind it, and the incoming Congress members are behind it, too. It's time to get ready. Tax Holiday Spells Market Boon The truth is, American companies are flush with cash. At last count, S&P 500 members were sitting on a $2 trillion mountain of liquid reserves. Ordinarily, surplus profits are spent on equipment upgrades, new factories and other such investments, known on the Street as "capex" spending. But right now, the environment is just too uncertain. Any cash not earmarked for dividends and stock buybacks has been hoarded. And despite having plenty of cash on hand, companies are actively borrowing rather than writing checks from their own account. Walmart (NYSE: WMT), for example, borrowed $3 billion in June and is now planning to sell new bond notes. That has many investors scratching their heads. Why would companies take on new debt when they already have $2 trillion sitting idle in the bank? Sure interest rates are low, but half of that cash pile is tied up overseas. Cisco (Nasdaq: CSCO) reportedly has $30 billion in foreign banks. Johnson & Johnson (NYSE: JNJ) and others have billions more. Unfortunately, the repatriation of foreign profits is subject to a punitive tax of up to 35% by Uncle Sam. That means the money can't be brought home unless the companies want to see a third of it vanish. So companies are simply letting it sit, choosing instead to borrow from bond investors rather than pay the tax. Microsoft (Nasdaq: MSFT) just borrowed $6 billion even though it has roughly $40 billion in idle cash. Crazy. Meanwhile, everyone is looking for pragmatic solutions to end the economic malaise and put people back to work. A temporary tax holiday for repatriated profits is gaining ground with politicians, especially the new members of Congress headed to Washington. It would mean multinationals could bring up to $1 trillion in accumulated income back to the U.S. private sector — where it could be harnessed and invested in countless job-creating projects. A few weeks ago, Intel (Nasdaq: INTC) unveiled plans for an $8 billion expansion project involving manufacturing facilities in Arizona and Oregon. Construction alone will create upwards of 8,000 new jobs. Instead of being big news, that could be just a drop in the bucket if Congress acted. We've tried every emergency fiscal and monetary measure in the book with minimal results. This common-sense approach will work. We know because it has happened before. When the Homeland Investment Act of 2004 slashed taxes from 35% to 5.25%, companies responded by bringing $315 billion home, much of which was plowed back into the economy. I'd expect this to happen again, only on a much larger scale.