Consider that the current crisis was not caused by government overspending, but family and business overspending. Many people went in way over their heads with credit card and mortgage debt. Financial gurus created debt instruments of debt repackages over and over in a great Ponzi scheme, all in the name of free markets. The whole mess collapsed of its own weight and took down the guilty and the innocent alike. Unfortunately, the captains didn't go down with their ships, but were first in the lifeboats carrying their safes.
I got to thinking about what kind of corporate debt does exist. Well, I am a small beneficiary of corporate debt; we own shares of some market-traded bond funds that give us a few hundred dollars of income every month.
Now is the time that semi-annual shareholder reports come out, and I checked one fund's holdings. Below is a sample of some of the businesses whose bonds are held by DWS Global High Income Fund (LBF) with the rate and due date.
HCA Holdings, Inc. offers health care services in the United States. The company owns, manages, or operates hospitals, freestanding surgery centers, diagnostic and imaging centers, radiation and oncology therapy centers, rehabilitation and physical therapy centers, and various other facilities.
- From Yahoo! Finance, http://finance.yahoo.com/q/pr?s=HCA+Profile
No wonder health care costs are so high. Many health care conglomerates can't live within their means.
Of course, these rates are low compared to credit card rates. By comparison, home mortgage rates are around 4.50 percent for thirty years. Treasury bonds are currently about 1.50 percent for five years and 4.25 percent for thirty years. Either certainly beats current bank savings account rates of less than one percent.
I would say that families that have only fixed-rate mortgage debt and the federal government are living within their means far better than some large corporations.
