Personally, my issue is that taking loans against equity is the reason billionaires don't pay any income tax. Sure, they should be able to take loans in order to keep their voting share, but not as a tax loophole.
For a long time this always felt awkward to me but I was never able to pin-point exactly what was wrong. Then I found georgism, with its claims of not needing any income and capital gains taxes, and it was even harder to quantify.
But I think now I've been able to work it out. There's actually two different types of loans but we treat them equally. The first is the nice type, the 'I built a factory, used that factory to pay back the loan with interest', that loan is a positive sum loan, the company wins, the bank wins, and the community wins. The second are loans for land, loans for stock, and other similar loans - these are zero-sum loans. The company can win, the bank can win, but someone is losing, and as is the community.
And so the real problem with this if you track how the money flows - a possible scenario is that a company might take out a bond, use the money for that bond to buy its own stock. The people who sold that stock and got that money might then go out and buy a house, the people who sold that house - you betcha, put that stock into an index fund, which includes a larger and larger share of the companies buying their own shares. Now that their share price is raised, they have more equity, and can once again take out another bond to do it again. It's a positive feedback loop. Each cycle is inflating the bubble. Valuations end up not being based on actual productivity, but on assumptions as to how money will flow through the markets.
We're at a stage now that the stock market flows of funds is only positive because of the stock buybacks. Companies that aren't buying back their stocks are going out of business. The Russel 5000 is getting punished despite the s&p recovering. We're at a stage now where north of 40% of all money is being held behind passive flows. We're now seeing the consequences of that with things like Netflix - when the stock does drop, it drops quickly and massively. Average volatility might be down considerably, but peak volatility is up massively.
