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This is a very informative article, but it has one major deficiency. I have a general rule that when we are looking at something going bad in our country, one
by woodandsteel 6y ago
This is a very informative article, but it has one major deficiency.
I have a general rule that when we are looking at something going bad in our country, one of the things to do is look at how the issue is handled in other countries, like are they doing it better or worse, and what can we learn from that that might help us decide what to do here.
With that in mind, the article should have covered how this whole corporate debt issue is handled in other countries. Are they doing better or worse? Perhaps someone who has some knowledge here could make a comment.
- smabie 6y agoWell, Japanese companies used to have a lot of debt in the 80s and when the crash came, a lot of them got hurt. Now, they're mortally afraid of debt and cant for the life of them ever expand their revenue. Japan is a cautionary tale of what happens when people save too much money, are too risk-adverse, and are unwilling to borrow. The BOJ has been trying to get inflation up for decades with some of the lowest rates around and it hasn't worked. The country has been in a recession for a good 30 years and no amount of monetary policy manages to make things any better. Debt is a really powerful force, both positive and negative. I think for some businesses, like real estate, it makes sense to have a lot of debt, and others, like brick and mortar retailers, where debt can very easily destroy your entire business.
- woodandsteel 6y agoThank you, that's a very interesting comment.