Debt always carries a default risk. This is a fact and has since the beginning of time. I don't see how anything fundamentally changes in the 80s.

You are wrong about the tax treatment of dividends vs interest received. In fact, dividends have the superior tax treatment to investors because of the qualified dividend rule. What you are looking for is the tax shield effect at the level of the company. Interest is deducted from taxable income, so if you have a company with no leverage earning $5 million a year in pre-tax profit, you pay $2 million in tax, with $3 million left to distribute. If the company takes on debt with $2.5 million in interest, now taxable income is $2.5 million with $1.5 left over after tax. This means now you have income distributable to investors (debt and equity) of $4 million vs the $3 million unlevered.