The answer to questions like this is always, "It depends."
Debt is a tool. Like all tools, it has proper uses and improper uses. It's good in some situations and bad in others.
Some extreme examples:
You've built the greatest widget of the decade. Orders for hundreds of thousands of dollars are flowing in faster than you can count them. The only problem is, you don't have money to manufacture the widget. So, you go to the bank and borrow $1 million to accommodate orders received. In this case, going into debt is a great idea because it's going to make you a lot of money.
Another example: You're retiring from your job, resulting in a drastic income reduction. Having saved about $500,000 cash, you're less concerned with increasing your income than maintaining it, so you're investing in passive, low yield investments, averaging 5% per year. You owe $120,000 on your house at 6.5% interest. Because your house is costing you more then you're making in interest, you decide to pay it off, eliminating the monthly payment. In this case, paying off debt is a good idea because you see a net gain of about 1.5%.
The only way to decide whether debt is a good idea or not is to calculate the upside and downside. It is NOT a philosophical question. It is simply a matter of gathering the facts about your individual situation and objectives and then deciding whether debt makes sense.
Jon
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