Corporate America Is Choking on Debt and Imperiling the Recovery
- Leverage ratios have never been higher for U.S. companies
- Covid-19 has caused both more debt and a crash in earnings
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After tapping the bond market at a record-shattering pace in recent months, Corporate America is more indebted today than ever before.
And while much of that fresh cash -- more than $1.6 trillion in total -- helped scores of companies stay afloat during the pandemic lockdown, it now threatens to curb an economic recovery that was already showing signs of sputtering. Many companies will have to divert even more cash to repaying these obligations at the same time that their profits sink, leaving them with less to spend on expanding payrolls or upgrading facilities in months ahead.