How much would it cost to guarantee debt for all publicly traded U.S. corporations?

Stephen Matteo Miller

Contemporary Economic Policy, 2024, vol. 42, issue 4, 604-622

Abstract: Estimated marked‐to‐market values of guaranteeing debt ex ante for all available publicly traded US corporations from Q4 1971 to Q4 2022 reveal that the largest estimates periodically arise with a handful of large financial corporations, but significant estimates can arise for nonfinancial corporations. In real Q1 2010 US dollars, the aggregate cost of guaranteeing debt reached $983 billion in Q1 2009 and $284.78 billion in Q1 2020 during the COVID‐19 pandemic. Large observed guarantee estimates may reflect moral hazard, but also concerns about avoiding substantial increases in unemployment or maintaining the provision of essential services during national emergencies.

Date: 2024
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