From the fifth page of Google results (see my two previous posts):
How the tax code encourages debt : The New Yorker
The article is The Debt Economy by James Surowiecki. It starts with a quote from John Kenneth Galbraith, one I think I recognize from A Short History of Financial Euphoria. So I felt like I had an "in" with the author, and I liked the article before I got past the first sentence. Oh, well.
Here's just a small piece of Surowiecki's article:
Debt didn’t get dangerously out of scale because the system was broken. It got out of scale, in part, because the system worked.
The government doesn’t make people go into debt, of course. It just nudges them in that direction. Individuals are able to write off all their mortgage interest, up to a million dollars, and companies can write off all the interest on their debt, but not things like dividend payments. This gives the system what economists call a “debt bias.”
But this excerpt seems to hint that maybe corporations should be able to write off both their dividend payments and their interest payments. No. Leave dividend payments as they are; that's not the problem.
And make corporate interest payments taxable. That will reduce the accumulation of private sector debt. And that is what must be done in order to restore growth.