Debt.

I don't like debt. I don't like the feeling of owing people and having to pay them back. It almost feels that what I have does not belong to me.

Personally, I don't like to owe people money. That is my personal opinion on debt but there are many other's who beg to differ.

I believed being overly-indebted is a symptom of financial imprudence and a sign that he/she is spending future money. This financial imprudence is actually to me a character flaw which needs to be corrected.

But in the modern day, who is not indebted in one way of another? 99% of us have mortgages on our houses, education loans are needed to paid off and our cars and vehicles are on hire purchases. It is not to say that debt in itself is bad but rather a sure sign of financial imprudence and character flaw.

This I believe is result of prevalence of debt as way of stimulating the economy. The result of Keynsian economics in modern society. The idea of helicopter money of boosting growth in the economy. The idea that growth should not be sacrificed at the altar of fiscal discipline.

I was reading Thomas Piketty's Capital and he estimated much of the developed world's public debt is 80-90% of the nation's economic output. This means that a country's wealth is wrapped up in debt. Whether the country itself is rich remains in question.

This in itself sets a bad example for the rest of the country. If a country's government is in itself incapable of getting itself of a debt trap, what more for it's citizens.

I did not do an in-depth study of companys' balance sheets but I was looking at Johnson's and Johnson's balance sheet- a blue chip of blue chip company, as claimed by a best-selling stock tipping book-, it was actually in large debt. This is not to say that it is over-leveraged or facing financial difficulties but rather if a blue chip of blue chip company has a great debt burden, what more can we say about the rest of companies in the so-called developed world. At the same time, this company is rated AAA+ by rating agencies, this means that it is the gold standard on all credit metrics.

Without looking into all other companies balance sheet, it is safe to say that most of them are probably in debt and are an even more precarious financial position.

I would have to add a further caveat that some companies actually borrow money to avoid taxes even if they are in a net cash position, but Johnson and Johnson actually uses more cash than it produces after they distribute dividends. This means that they are incapable of growing organically without resorting to external debt.

How can a company that is incapable of producing sufficient cash for it's own usage after distributing profits to it's shareholder's be rated AAA+. Any growth than in this case, is leaning on a debt crutch.

USA is a leader in the financial world and it is well-known that is heavily indebted country and does not practice financial prudence. This means that the government spend beyond their means and this is well-known. This I believed has also results in it's companies relying heavily on debt and also the common person on that street as well.

You can read in the news everywhere how heavily in debt many Americans are- education loans, housing loans and credit card loans. Less the said, the better.

Debt is important but it should not be a crutch that one relies on. Financial discipline is just as important.