Unquestionably, some people have become very rich through the use of borrowed money.  However, that’s also been a way to get very poor.  When leverage works, it magnifies your gains.  Your spouse thinks you’re clever, and your neighbors get envious.  But leverage is addictive.  Once having profited from its wonders, very few people retreat to more conservative practices. And as we all learned in third grade- and some relearned in 2008- any series of positive numbers, however impressive the numbers may be, evaporates when multiplied by a single zero.  History tells us that leverage all too often produces zeroes, even when it is employed by very smart people.

By Warren Buffett as written in the most current annual report of Berkshire Hathaway, Inc.

HKO comment-

This is just as true with individual debt as it is with business debt and government debt.  Debt is a dangerous tool in the hands of the competent; in the hands of fools it is a disaster.  The problem is that for a short period of time debt can make fools look competent.