A Primer on Borrowing
Is debt America’s newest four letter word? If you’ve been listening to the debate in Washington over the last year, it seems like a logical conclusion to draw.
However, that conclusion is too simplistic.
To be clear, not all borrowing is a good thing, and America must tighten its belt. Yet the simple fact is that debt, in the right amount, is essential for the smooth functioning of America’s highly complex economy. Without debt, our economy would be like an engine without oil, it would just stop.
This “Primer on Borrowing” from the Capital Markets Initiative explains how businesses, consumers, and governments use debt every day to create value and economic growth. It is important for policymakers to understand the central role that debt plays in creating economic growth, because whether America stands atop the medal stand in the world economy will be determined in part by how wisely we— government, business, and citizens—borrow for our future.
To read this, open the attached PDF (under "Downloads")