The debt trap

RNG

Apr 2013
38,656
26,645
La La Land North
Here is a scary stat:



US corporate debt continues to hit new all-time highs.
The chart above shows how little operating income (technically, nonfinancial companies' funds from operations) supports the median American company's ever-growing debt load.
  • Think of this in personal finance terms. Financial advisers like to say that you shouldn't have total debts, including your mortgage, of more than 2.5 times your income. In corporate America, that ratio is now more than 6.5 times.
  • Up until now, interest rates have been low and credit has been flowing freely, making it easy for companies to service these debts. But now rates are rising, and these debt loads could start to bite.
"Given where we are in the credit cycle, there are concerns about how and when prevailing conditions will turn. Such a change could spark bouts of strong volatility and periods of rapidly rising financing costs and illiquidity — limiting borrowers' financial flexibility — giving rise to increased defaults."
— Jacob Crooks and David Tesher, S&P Global Ratings
The one time surge for corporations from the tax cut is history. The future is problematic.

From Axios Edge Newsletter.
 
Jul 2014
15,263
9,364
massachusetts
And with rising interest rates, servicing that debt can take most of the income.
 
Nov 2012
41,152
11,840
Lebanon, TN
from 2009-2016 Borrowed 10,000 Billion dollars, printed 7,000 billion dollars, all to create a 1.6% GDP Growth.

2018, 877 billion was borrowed but created a 3.6% GDP Growth.

Who's policies are more efficient economically?
 
May 2018
4,448
3,421
USA
from 2009-2016 Borrowed 10,000 Billion dollars, printed 7,000 billion dollars, all to create a 1.6% GDP Growth.

2018, 877 billion was borrowed but created a 3.6% GDP Growth.

Who's policies are more efficient economically?
"borrowed", he says.

Trump's massive upper class/corporate giveaway increased the budget deficit by over 32%. That's IN ADDITION to the $2-3 trillion in debt it'll add in the next 10 years.

Ooops. More "fiscal responsibility" from the GOP....