Debt came down during the depression in the 1930's due to defaults. It was not repaid. The lenders lost the money. Banks and businesses closed. Unemployment soared. Real estate values plummeted as people lost their homes.
Alkalize For Health notes that interest on debt is not a cost of doing business. Rather, it is a cost of financing. A business without debt may succeed where an identical business with debt may fail, due to the burden of interest charges. Debt destabilizes the economy. Debt accelerates growth during good times and accelerates bankruptcy during recessions. Therefore, for a more stable economy, Alkalize For Health recommends that interest expense on all forms of debt no longer be tax deductible when calculating income taxes. (Total U.S. Debt chart courtesy of Gabelli Funds.)
The liability/debt side of a balance sheet is always reliable. The asset side of the balance sheet is often unreliable. Those who feel today's high debt levels are not a problem because they are backed by mortgages and other assets are standing on a quicksand of unstable valuations. read on---
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