The Magic of Debt
Wednesday, August 23rd, 2006In my position as boss of a small company, whoa, stop right there. I had 130 employees at my peak. Not exactly General Motors but I never thought of my company as a small business. I really thought of it as a giant pain in the butt whose sole purpose was to support my employees and their families on modest wages and make me rich. To me, small businesses are those where you make a down payment on that lawnmower and rake combo and whoosh! you’re in business. The difference, I guess, between my business and the lawn guy is that if he went bad, all he had to do was go out and find himself a job and maybe hock that mower and rake thing for some quick cash. If I went bad, the nightmare scenario of bankruptcy proceedings and nervously counting cash while fat guys in bad suits and sunglasses stood around me cracking their knuckles, would begin even before the power company turned off the juice. Simply stated the qualifying difference between a small business and a big business is how much you owe. Answer this question, Mr. Businessman - If you shut down your operation today, could you pay off all your debts and walk away clean with money left over, or not? If you stopped tomorrow, would somebody be left holding the bag? There’re only two answers and there’re only two choices if one of them is yes. Let’s examine the possibilities.
Possibility #1 - Yes. In this case, if you can walk away clean, you are probably an extremely small business where you most likely did everything by yourself, maybe had a few employees and on a good week you were able to pay most of your overhead and actually eat a bit of food. You’d probably make more money working for somebody else but at least you are your own boss, you get to set your own vacations and even diddle the secretary or the girl who brings sandwiches around at lunch once in a while. Life is hard and you’ll never get rich this way, but if you don’t want to get out of bed some mornings, you don’t have to.
Possibility #2 - Yes. In this case you owned a larger business and you probably stole money faster than it was coming in. Furthermore, you are my hero. In the category of victimless crimes, stealing from yourself is my number one favorite. You never have to worry about the guy with the secret drug problem falling apart at the last minute and blowing the entire scheme, there’s nobody looking over your shoulder, as long as the taxes are paid the government will never know (or care) and there are constitutional amendments to protect you from testifying against yourself. God bless America! No matter what your background and education, no matter what type of business you own, stealing from yourself is the fastest, easiest, most foolproof way to make money ever devised by modern man. It ranks right up there with the computer, the cell phone and Viagra as great inventions of the 20th Century. And it wasn’t until greedy idiots like the Enron guys and the MCI jerks applied this time honored formula to PUBLIC COMPANIES (Damn them! Damn them to hell!) that the public caught wind of what was going on and got pissed off. My God they’ve stolen all the money and used it to buy big houses and cars and hookers! Right. Like that was new.
Possibility #3 - No. You are an honest businessman, running a very large company and you are maybe the last one alive today. You pay all your bills, draw a large but easily sustainable salary with perks, drive a nice but modest car, pay all your taxes, give your employees benefits they wouldn’t get anywhere else and everybody works hard and respects you. They probably call you “The Old Man” in reverential tones when you’re not around. BORING!
The point is this: The bigger the business you own, the more debt that you have, the more money you can make. If your business grosses 100K per year there’s no way in hell you can make 200K no matter who you stiff and how much you steal. Period! How much money you can make is simply a factor of how much money you owe. The more you owe the more you can make - or steal. Debt is good. All together now, 1, 2, 3 - Debt Is Good! And God Bless America!

