Excessive corporate debt

In 1990, economic models prepared in the USA indicate that in the event of a recession, the effects on corporations would be catastrophic because of their current level of debt. Corporations would be unable to generate sufficient cashflow to cover the interest on the billions of dollars they have borrowed during the 1980s. In the USA, debt service costs as a percentage of cash flow for non-financial corporations reached an all-time high in 1990 at 31%, having risen from 18.5% in 1985.