Why Fed “Stimulus” Failed: Companies Borrowed Billions to Buy Back Stock, Not to Invest

Investment is stuck at low levels by historical standards. President Donald Trump’s reduction in corporate taxes hasn’t changed the pattern. Neither has a decade of low interest rates, even before the Fed’s quarter-point cut on July 31. It’s not that business stopped borrowing. As a share of gross domestic product, corporate debt has climbed to a record. What’s all but vanished is the correlation between how much companies borrow and how much they invest.