You know, buy control of a company by using a pile of debt, firing a lot of employees, and selling some hard assets. Then, use the cash flow to pay capital providers of the transaction through principal payments, interest, and special dividends. In the medium- and long-term, this behavior tends to destroy (read: bankrupt) companies due to reasons such as not adequately investing in maintenance and human capital and necessary SG&A.
Now, apply the old LBO model to a sovereign nation and what do you get? [Well, besides the decline and fall of the Roman Empire.] You get a lot of debt, misallocation of taxpayer dollars to things like subsidies (corn, sugar, etc.), excessive global military presence, and lack of infrastructure maintenance.
That said, an article titled “Life in the Slow Lane” by The Economist (April 30, 2011) indicates a red flag of not maintaining one’s infrastructure. I suppose this is another data point that complements our blog from March 2011 titled “Remember the Off-Balance Sheet Shenanigans of Enron?”