Executive Summary
As the nation struggles to work its way out of recessionA recession is a significant and sustained decline in the economy. Typically, a recession lasts longer than six months, but recovery from a recession can take a few years. , Americans are feeling the pinch of the $10.6 trillion total U.S. debt. Fueled by record spending at all levels of government, highly leveraged financing by corporations, and record consumer credit card spending, the debt currently amounts to a $42,277 IOU for every man, woman, and child in the U.S.
In the past decade, total U.S. debt from the government, corporate non-financial business and household sectors has nearly tripled, jumping from $3.9 to $10.6 trillion. Households and non-financial businesses hold the largest shares of total debt, $3.7 trillion and $3.5 trillion respectively. These amounts are more than double their 1980 levels. Yet their percentage shares of total debt have actually fallen slightly due to the even more rapid increase of the federal government’s debt.
The federal government has been on a spending spree, more than tripling its debt from $743 billion in 1980 to $2.6 trillion in 1990, increasing the federal slice of the total debt from 19 to 24 percent. State and local government debt has grown less rapidly, but nevertheless, it has more than doubled during the decade.
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