reply to Maggs
Re: Insurance Money The resulting electrification is a permitted but regulated monopoly. It was also loans, not welfare.
Are we saying Verizon is only getting low interest federal loans? Regarding low interest, credit is so cheap what is "low interest"? To be worth it, it almost has to be NO INTEREST. Since the government will sell bonds to acquire the money, that's more public debt and it will cost all of us.
MaggsLife is awesomePremiumReviews:
If the fed govt credit guarantees the loans, Verizon can borrow money at next to nothing. Just look at their capital lease obligations paying 6.8% in interest in 2010.
Look at the fact there's $5,902 million outstanding debt due in 2012. Imagine borrowing $5,902 million at 6.125%, and you thought home mortgages were expensive.
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Why in the world would they be paying that much? I remember reading about a recent rush by otherwise healthy companies to issue tons of debt. Reason? Because it's practically free.
I don't think WE should be paying Verizon to rebuild anything that isn't regulated. If it's regulated, maybe, since we limit the profit they can make. However, Verizon has also been accused of "fixing" their books by pushing all kinds of expense into their regulated area to artificially inflate rates. This likewise deflates the true operating expenses of their non-regulated LOBs where it doesn't matter how much profit they show (other than corporate taxes).