I think you're conflating borrowing & spending with profit & loss, which is a separate thing. Borrowing literally just means taking money from other people. O

I think you're conflating borrowing & spending with profit & loss, which is a separate thing. Borrowing literally just means taking money from other people. On the consumer side this means taking out loans for mortgages, cars, and credit cards. On the business side this means taking out business loans or issuing bonds. Yes, it will impact your balance sheet, but you don't calculate borrowing or spending by looking at profit and loss - these are all separate accounting categories. What I think the author was getting at is that generally speaking, when you borrow money the "good" thing to do with it is to use it toward economically productive means. You borrow money for a car so you can use the car to drive to work to make more money to spend on things you need. Businesses borrow money from a bank or equity firm so they can build a new factory to produce more things to sell to customers. The problem is when borrowing becomes divorced from economically productive spending. In the housing bubble this took the form of consumers borrowing huge amounts of money they could never afford to pay back not so they could be more productive and spend it on useful things, but rather so they could play at being housing speculators. Today's big issue is that businesses are borrowing large amounts of money just to do share buybacks [1]. They do this because borrowing money is so cheap right now (interest rates have been absurdly low for the better part of a decade) and they don't actually have good capital investment things to spend their money on any more. So the result is boosted share prices via borrowing, without any corresponding economically productive spending to go along with it. Student loans are another form of this on the consumer side - millions of American students rack up tens of thousands of dollars in debt (they're borrowing money from student loan providers) and then their jobs at graduation suck so they can't afford to actually spend money on productive things - too much of their income goes to paying the interest. Related concepts you might be interested in: Velocity of money [2], Debt to GDP [3], Debt to equity [4] [1] https://www.cnbc.com/2019/07/29/buybacks-companies-increasingly-using-debt-to-repurchase-stocks.html https://www.cnbc.com/2019/07/29/buybacks-companies-increasin... [2] https://fred.stlouisfed.org/series/M2V#targetText=The%20velocity%20of%20money%20is,services%20per%20unit%20of%20time https://fred.stlouisfed.org/series/M2V#targetText=The%20velo.... [3] https://en.wikipedia.org/wiki/Debt-to-GDP_ratio https://en.wikipedia.org/wiki/Debt-to-GDP_ratio [4] https://www.investopedia.com/terms/d/debtequityratio.asp#targetText=The%20debt%2Dto%2Dequity%20 https://www.investopedia.com/terms/d/debtequityratio.asp#tar...(,evaluate%20a%20company's%20financial%20leverage.