Matt Levine’s Money Matters: It Costs Not To Pay Your Debts

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Matt Levine's Money Matters: It Costs Not To Pay Your Debts

The way business works is that you have some assets and they’re funded by some liabilities. The assets generate some income which you use to pay back the liabilities. You borrow some money, you buy a machine for your factory, the machine makes widgets, you sell the widgets, you get money, you pay back the money you borrowed, you have some money left over as profit, life is good. One way to make more profit is to make the assets worth more, to make them produce more income; if you can tune up the widget machine to make more widgets …

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