The New York Times reports that companies have more cash on hand than they have since the 60's and wonders what happened to all that debt. Two observations:
In the table they included with the article, it's astounding to see how overblown everyone's fear of leverage was in the 1980's. Leverage declined throughout! And apparently 1998 was a great year for getting rid of cash, and piling on debt -- it's the only year that sticks out as an aberration rather than part of a trend.
On the other hand, one reason companies are less leveraged could be that the leveragable ones are going private faster. One of the advantages of public equities is that you don't need fixed cashflow because you haven't promised investors fixed income. Perhaps the companies that can consistently report EBIDTA minus capex of within 5% of where it was last quarter are all owned by Blackstone and Cerberus. The best evidence for this would be to look at volatility of EBIDTA (not earnings -- too easy to fudge) compared to cash on hand for the average public company. We'd probably see wilder swings even though the economy is not so swingin'.