Comment 57285

By Ryan (registered) - website | Posted January 20, 2011 at 22:05:33

There's nothing wrong with debt per se; in fact it's the cost of doing business. The two important questions to ask are:

  1. Are you incurring debt to acquire an asset that will generate an increase in net value?
  2. Can you afford to service the debt?

LRT is more expensive to build and operate than buses, but it also generates a bigger net benefit. As Nicholas argues, it is misleading to focus on the cost without putting it into the context of the corresponding benefit.

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