Interesting Notes on Corporate and Government Debt

Rob Chrisman over at the Pipeline Press included this excerpt in his daily blog post that I found entertaining:

Moody’s predicts that the U.S. will spend more on debt service as a percentage of revenue this year than any other top-rated country except the U.K: 7% of taxes for debt payments in 2010 and almost 11 percent in 2013. Some believe that all the G7 countries, except Canada and Germany, will have debt-to-GDP ratios close to or exceeding 100 percent by 2014. On the flip side, of course, is the theory that unprecedented spending in the US and the Federal Reserve’s emergency measures to fix the financial system are boosting the economy and cutting the risk of corporate failures. Berkshire Hathaway (rated Aa2 by Moody’s) has about $157 billion of cash and equivalents and about $52 billion of debt. In fact, corporate borrowers are reducing debt at a record pace while the US government is expanding debt at a record pace. Companies in the S&P 500 cut their liabilities by $282 billion to $7.1 trillion in the fourth quarter, 28% of assets, the least in at least a decade, and their cash position is rising with a record $2.3 trillion as of the fourth quarter, according to Bloomberg.