Stock buybacks are dangerous for the economy
> <i>Taking on debt to finance buybacks, however, is bad management, given that no revenue-generating investments are made that can allow the company to pay off the debt.</i><p>This seems to be the crux of the article, and it appears to be completely unsubstantiated.<p>First of all, this article isn't about just stock buybacks -- the argument of the article applies broadly to dividends just as much, save for minor details.<p>The point the article is making is that profits ought to be reinvested rather than paid out. But <i>obviously</i> mature firms often can't find ways to reliably re-invest. They don't <i>need</i> to grow any further, nor should they. So investors <i>want</i> them not to re-invest, and throw off dividends or buybacks instead. This way <i>investors</i> can fund the next generation of companies.<p>And taking on debt to do it isn't inherently irresponsible. In fact, it's just a wise financial decision when interest rates are low. New revenue streams aren't required to be generated -- it's just shifting a subset of future revenue to the present.<p>So I really don't get this article at all.