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Yes corporations do it for economic benefits.

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What do you mean by this? A corporation with revenue less than the sum of it's operating expenses and interest on loans would have a hard time finding investors, unless it was a severe outlier with some hope of massive future revenues.

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The favorable tax treatment of debt is why more or less.

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Even the favorable tax treatment of debt isn't enough for private enterprises to engage in a borrowing-on-top-of-borrowing practice with no hope of ultimately making a profit. Government on the other hand...