The companies that the credit-rating agencies should be more vigilant over look more like Tyco International and Vivendi Universal, which have had to unwind debt-financed mergers because their capital structure couldn't support the weight of their debt issuance.
Low income from overseas affects firms' investment, employment and wage decisions at home, argues Mr Lane.In theory, a debt-financed current-account deficit, without offsetting capital gains, will make a country poorer in the end.
It would mark the end of debt-fuelled capitalism, debt-financed socialism - and debt-drenched consumer spending.
Limiting the deductibility of net interest as many other developed countries do would discourage excessive reliance on debt financing but would yield higher tax burdens on manufacturing and utilities, sectors with significant investments in physical capital that are often debt-financed.
Desperate to secure an asset base against which debt could eventually be redeemed, those without capital herded en masse into debt-financed property bubbles that were always going to burst, leaving many with no equity and a hugely enhanced personal debt.
Through monopolisation of capital markets, deployment of unprecedented leverage capital has centralised around a model of debt-financed speculation that – without any due diligence – has been transferred wholesale to the taxpayer, more than doubling the entire national debt.
Second, the constitutions of most of the states require balanced operating budgets (as distinct from capital budgets, which properly tend to be debt-financed).
In a recession it will be harder still.Brazil's parlous finances leave no room for debt-financed stimulus.
Estimating cost of capital for large marketing and technology investments at a debt-financed brokerage firm.
The most serious microeconomic risks are: maturity risk from over-reliance on short-term financing for long-term investments; foreign exchange risk from over-use of foreign capital for investments in non-tradable goods; credit risk from debt-financed speculation in asset bubbles; and fiscal gap risk from public sector dependence on unsustainable revenue sources.
