The Rise of Zombie Corporations and America’s Debt Trap: What They’re Not Telling You

In today’s global economy, an alarming number of businesses are operating on financial life support. There’s a term for these companies — zombie corporations. These are businesses that have been drowning in debt for years, unable to generate enough profit to cover interest payments or repay their loans. Yet, they continue to exist, not through profitability but by borrowing more money to pay off previous debts.

The Cycle of Debt: A Growing Crisis

The zombie corporation problem isn’t just a business issue — it reflects a broader economic instability. Instead of becoming financially viable, these companies take on new loans just to stay afloat, making them even more dependent on debt year after year. This unsustainable cycle mirrors the way national economies, including the United States, manage their own debts.

But who keeps lending money to these failing businesses and governments? The answer may surprise you.

America’s Biggest Creditors: Japan and China

While the United States is the world’s largest debtor, its second-biggest creditor is China, with the U.S. owing roughly $850 billion to the country. Ironically, a portion of American taxpayer money — paid through taxes on essentials like food, fuel, and even cigarettes — ends up going to China in the form of interest payments. This helps China strengthen its economy, even as the U.S. struggles with its own financial stability.

At the same time, China supports Russia’s stance on Ukraine, while continuing to lend money to the U.S., which in turn funds Ukraine’s war effort. It’s a bizarre financial loop that few people truly understand.

A Declining Empire: Who Pays the Price?

History has shown that when empires decline, the burden of economic hardship always falls on the working class. The rich and powerful, knowing that the system is failing, find ways to shield themselves, while regular people struggle under mounting financial pressure.

• Wages Stagnate While Prices Soar: Inflation has been rising faster than wages, making everyday essentials unaffordable for many.
• Union Suppression: Workers’ rights have been eroded for decades, preventing collective bargaining for better wages.
• Interest Rate Hikes: While interest rate increases are presented as a solution to inflation, they disproportionately harm middle- and lower-income Americans who rely on credit for everyday expenses.

Inflation: A Systematic Squeeze on the Working Class

Inflation isn’t just a natural economic phenomenon — it’s a deliberate decision by those in power. Prices don’t rise on their own; they are set by corporations looking to maximize profits. When wages fail to keep up with inflation, it’s effectively a pay cut for workers while businesses rake in higher profits.

The same pattern played out during the Vietnam War, when the U.S. government printed money to fund the war effort without raising taxes. The result? Skyrocketing inflation. Back in 1971, President Nixon took an unexpected step: he froze wages and prices overnight, stopping inflation in its tracks.

So why isn’t that solution being discussed today? Because it would cut into corporate profits and limit the financial gains of those who benefit from the current system.

What’s Next?

As zombie corporations continue borrowing their way into deeper financial trouble and the U.S. government remains trapped in a cycle of debt, it’s clear that something has to give. Whether it’s a financial collapse, a major economic restructuring, or a shift in political priorities, the question remains: Who will pay the price?

One thing is certain — the working class is already footing the bill.