The last three times that private businesses cut back on fixed asset expenditures – plants, trucks, tools, software, hardware, equipment, office buildings and other capital goods – the country slipped into recession. Is this time different? Or does company reluctance to buy machinery, commercial real estate and electrical appliances signify that economic contraction is around the corner?

Most analysts seem to believe that the investment slowdown by the business sector is temporary. Some have even opined that spending on fixed capital will pick up after the November election.

On the other hand, spending patterns by all businesses suggest that the slowdown may be entrenched. Inflation-adjusted spending on capital expenditures (a.k.a. “Capex”) is up only 33% in the seven-plus year recovery. In the same point in the cycle in similar recoveries? 62% total capital spending.

Clearly, companies have abstained from heartily investing in the future. And yet, there has been no shortage of borrowing by public corporations. In fact, public companies are on pace to borrow nearly 100% more money on an annual basis than they borrowed back in 2009.

Corporations are spending the money that they borrow. They’re just not spending it on their long-term growth. In truth, they have been funneling the bulk of the newfound cash into stock share buybacks and dividends. While share buybacks have done a fine job at reducing the supply of stock, and while dividends have enticed yield-seekers in the era of zero percent/negative percent rate policy, the near-sighted spending activity may be hurting business sales.

Some believe that strength by the consumer is the reason why Americans can remain optimistic about stock market prospects as well as the broader economy. On the other hand, real retail sales are downright anemic. The year-over-year trend suggests broad-based consumer weakness.

Well what about those home sales? Aren’t they on fire? That depends upon who you ask. Existing home sales in July are down 3.2% from June; they’re down 1.6% from the previous year. Most notably, they are down 10.7% from the turn of the century on a population-adjusted basis.

It is not particularly difficult to identify a key reason why: (a) business capital spending has been so poor, (b) business sales have reverted to 2012 levels, (c) consumer spending has been flat, and (d) home sales have been weak, even with remarkably low mortgage rates. The problem? There’s been no wage growth in the 21st century.

The fact that there’s been no growth in real household income over the last 16 years is troublesome because: (a) inflation-adjusted home prices have climbed roughly 20%, (b) inflation-adjusted medical expenses have catapulted approximately 33% and (c) inflation-adjusted college education costs have surged as much as 50%. Granted, lower mortgage rates have made it possible for homeowners to borrow larger amounts to get property, but many struggle to come up with the down payment. Meanwhile, additional funds spent on health care and education leave the 21st century household with less purchasing power than it had in the 80s and 90s.

Business executives recognize that something’s not quite right. So they borrow money “on the ultra-cheap,” focus on short-term manipulation of earnings through the acquisition of corporate shares, and sit on any remaining cash to self-finance the next downturn. Can you blame them? Share prices on the S&P 500 sit near record highs in spite of an earnings recession that has been in place for six consecutive quarters. Note: And these aren’t even the GAAP earnings per share (EPS), but rather, the “report-what-we-want-to report” adjusted earnings per share (EPS).

At this point, an economic recession might not even rattle the fully invested stock devotee. He/she is no longer concerned with exorbitant valuations or economic stagnation; rather; he/she is only concerned with central bank stimulus. As long as Europe and Japan keep the electronic money flowing – as long as the Federal Reserve does not do anything drastic like raise an overnight lending rate or cease to reinvest the proceeds from bonds bought from earlier quantitative easing – the S&P 500 has a chance to remain at elevated levels. It might even move a bit higher.

There is one wrinkle in the designer shirt, however. The day may come when investors lose faith in the ability of central banks clear across the board, from the European Central Bank to the Bank of England to the Bank of Japan to the Federal Reserve. And that day may come sooner than you think.