The major reason companies plowed money into buybacks rather than capital spending was that, in a low-growth environment, the returns from investing in expansion didn't seem as attractive as in the past. This is a big part of why companies were able to borrow cheaply: In a low-growth, low-inflation environment, investors were willing to accept lower returns on corporate bonds than if the economy was moving at a more rapid clip.

The sticking point is that in a low-growth environment, paying down debt also may be harder. Especially because companies weren't putting the money they borrowed into capital investments, which provide cash flows to help service debt. The stock they bought back won't do that for them.

Even if this doesn't present an immediate problem for all companies given how they refinanced debt to longer maturities, it could be a long-term drag on earnings.

Of course, if necessary, companies could issue new equity to help meet debt payments. But existing investors would get diluted.

In many cases, companies have large cash reserves they could tap. This, too, has drawbacks. One is that, in cases where the cash is overseas, it might be subject to taxation before it could be used. Another is that companies' cash holdings are reflected in their shares. If their cash is diminished, so is their share price.

Investors who cheered as companies bought stock with borrowed money could end up blanching when they see the bill.

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