Comments by "looseycanon" (@looseycanon) on "The Bankruptcy Boom" video.

  1. That would bring it's own set of trouble with it, though. Say you wanted to make a lumbering big conglomerate more efficient, breaking it down into smaller chunks based on activity done by each individual chunk can help with that, because, for instance, what were mere support processes for manufacturing before can become revenue generating processes in them selves. Objection, that owned company owes debt would then arbitrarily prevent a company to reform into a more efficient version of itself. To ilustrate, take big manufacturing company from Texas, making some kind of industrial machine and selling it both on domestic market and for export. Breaking that company down into individual chunks department by department would allow that same company to market under different names more tailored for it's own market, while at the same time handling the same agenda for the now only manufacturer. From that one inflexible conglomerate, you can have accounting company, export-import business, IT business, logistics company, real estate developer... all runing more efficiently, because they are not tied to the primary business, and if the original manufacturing business folds, the other companies to can survive and preserve more jobs, than if the company didn't break up... And that's not even starting with the international aspect of the thing, because pooling multiple manufacturing companies and then creating foreign company to represent all these would also bring advantage to the whole group, for instance, accepting local currencies and engaging in biderictional trade with said foreign market. The problem is not, companies breaking up as they see fit. The problem is, companies holding bank debt paying out dividends and sometimes even being forced to do it by the court. Famously Henry Ford lost a case about this, when, instead of paying out dividend, he decided to pay out bonuses to his employees, and shareholders sued him over that decision. So, what I'd like to see, would be about 75% tax on dividends, if company owed any debt for longer than 30 days, except of debts steming from an invoice with longer pay period, in which case such invoice going overdue would be the criteria to trigger the tax. I would also want to see that ruling overturned with language in the court opinion speaking about long term financial sustainability of the business.
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  2.  @andrewyork3869  The problem is, how do you implement ban on such a practice? this is why I'd go with a big tax, when there are obligations to pay something. Remember, whne you buy on invoice with pay period, you're buying on loan, that should also be repaid. This is easy to track and you can legislate for it being disclosed. As to the 30 days. From my experience as accountant, it's the most common deadline from date of issue of the invoice, which is why I recommend that.
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