"For The First Time In Modern History" US Government Debt Will Surpass Household Debt

Tyler Durden's picture

Last week, rating agency DBRS raised a red flag when it calculated that in the past decade average US wages have risen by only 5.7%, while consumer debt over the same period rose 60% more, or 9.3%. However, while the US household's reliance on debt to fill in the income gaps is hardly news, on Monday JPMorgan found another, even more concerning debt inflection point: household debt, fast as it may be rising, is about to be eclipsed for the first time ever by the even faster rising federal government debt.

As JPM writes in its weekly market recap, prior to the Financial Crisis, household debt relative to federal government debt hit a high of 3 to 1 times. Since then, a combination of bank credit  tightness and consumer prudence has sharply limited the growth in household debt, with liabilities increasing just 4% since 3Q 2008. However, JPM adds, "the same cannot be said of the federal government, with liabilities increasing almost 150% over the same period and nearly reaching household debt levels for the first time in modern history."

JPM continues:

On top of that, the CBO projects that, even excluding the impact of tax cuts, government debt levels will continue to march upward over the course of the next 10 years, ultimately hitting $25.5 trillion by the end of 2027.


While this does not point to an impending crisis, it does mean that, should another downturn occur, the government would be far less able to come to the rescue as it did in 2008. It also means that while tax cuts may take place today, it becomes all the more probable that they will become tax increases or spending cuts in the future, with tax increases likely to hit higher income households and elderly households being more vulnerable to spending cuts.

Finally, "this means that while consumers have taken steps on their own account to ensure a smaller debt burden, older and wealthier households should be particularly wary of the potential impact of rising government debt on their finances" especially once the next government - far more likely to be of the "wealth redistribution persuasion" - decides to do just that..

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nope-1004's picture

That's what happens when .gov buys equities....

Next one won't be a balance sheet debt crisis, but a sovereign crisis.

Delving Eye's picture

I owe the government, and the government owes me. Revolving debt.

shitshitshit's picture

Look 'ma I can wank with one hand, yeepee!

NoDebt's picture

We're already about 8 exits past "way too late".  Might as well keep going until we hit the wall.


hedgeless_horseman's picture


While this does not point to an impending crisis, it does mean that, should another downturn occur, the government would be far less able to come to the rescue as it did in 2008. 


Is there something wrong with the Heidelberg presses or the helicopters?

Is the Discount Window stuck?

Have they lost the keys to Hank Paulson's tanks?

BennyBoy's picture


Moar debt=moar money!

What dont you understand about the US debt based financial system?

Now we're all rich, bitch!

Bes's picture

it's a good thing trump sees

this bubble, is calling out

the FED and Wall street.

As well as taking proactive steps to address this

before it collapse and wipes out more

of America's lower and middle class

er.......................... nm...........


Antifaschistische's picture

spoiler alert spoiler alert...

.gov debt....IS ALSO household debt.  it's just a matter of time. 

you will pay with a check...

you will pay with a deduction FROM your check...


you will pay with the value of your paycheck being cut in 1/2

Five Star's picture

Not sure where that graph is getting its numbers cause government debt is already well over $20 trillion


MonetaryApostate's picture

Money printing is the only thing surpassing everything, including all that you or your entire ancestors worked for.  Stolen!


ne-tiger's picture

Let's double our "offense budget" to give little fatty an even harder time: all the warmongers will flip twice as many burgers to contribute!

translator zero's picture

US Government Debt Will Surpass *Household Debt*

And that's saying something!


Gead's picture

"One of these days..... to the moon, Alice!!!"

Antifaschistische's picture

....what makes me mad, is that if you have ZERO household debt.

you're STILL going to have to pay for all the .gov debt!! one way, or the other

Gatto's picture

" ultimately hitting $25.5 trillion by the end of 2027"
Haha!  The Federal debt will be at least 40 trillion by 2024!  It doubles, or more,  every eight years!

ParkAveFlasher's picture

Making 1929 great again.

Look on the bright side; there will be a lot of hobo songs for lefties to take up in their doctoral studies.

Bill of Rights's picture

We can do better..

NoDebt's picture

I think we're just not trying hard enough.  Surely we can all go out this Christmas and max out at least ONE credit card.  That's not asking too much, is it?


Rainman's picture

Just for shits and giggles, let's see state and local government debt next....$ 1.85 Trillion 

Dr. Richard Head's picture

Does this government "debt" include unfunded liabilities?  Pretty sure with that the government has the plebe beaten hands down.


The beatings will continue until morale improves. 


Rainman's picture

mathematically, this horse race doesn't matter any more

Bondosaurus Rex's picture

People on the dole are living better than people that work.

Alexis de Tocqueville called it spot on.

Teletubby's picture

Anyone still arguing right/left is a moron. Anyone still playing by the rules is a fool. Anyone guilty of both is poor. - Teletubby

buzzsaw99's picture

shouldn't the yield on the 10Y be rising?  /sarcasm

LawsofPhysics's picture

"debt does not matter, we can print money" - Ben Bernanke

Yen Cross's picture

  Is this .gov debt figure  without the Fed. balance sheet? [ $4+t]

 I have the national debt at $20.5 trillion. The chart above has .gov debt at $15 trillion.

24Richie's picture

The $15 trillion is debt owned by the public.  The $20 trillion includes what Treasury owes to the SS and Medicare Trust Funds.

nsurf9's picture

That would now make your 2017 $100 dollar bill a 2007 $66.6 dollar bill - fitting number don't you think.  And, a total of $4.44 stolen by the US federal government, not include inflated taxes.  And, its likely more than that.  And, more to come that hasn't even made it into full dilution of the money supply.

I'm just wondering if they'll need a 10 foot lamp post, or 12.

directaction's picture

Check your third-grade arithmetic

rejected's picture

And no one,,,NO ONE ever mentions the 21 trillion dollars missing from only 2 agencies.


And PCR has a new post concerning the Emperor's Tax Bill.  I DO NOT recommend this reading for our fair and balanced Trumpeteers. 


Pernicious Gold Phallusy's picture

Somewhere I was reassured it's no big deal, because we owe it to us.

falak pema's picture

And.. the GOP tax cuts are only gonna make the private PEOPLE's debt bigger and bigger; all the while the 1% get richer and richer...

The best way to destroy a nation is to make the 99% the DIRE enemies of the 1%; that was the great lesson of the French Revolution...Now coming to Lafayette's other country; the one HE TRULY LOVED ! 

Lafa didn't buy into Robespierre and Napoleon, he wanted a balance between blood letting and divine rights. A true republic.

He was right and his true horizon was  a young nation called the US which he had the immense happiness to see born when he was 19 years old, when he arrived in the revolted British Colonies as an adventurer passionate about freedom.

A true Millenial of his times! Not a man of status quo nor a suppot of reactionary Imperial order that the US is today; that Rule Britannia was then ! 

Vlad the Inhaler's picture

"should another downturn occur, the government would be far less able to come to the rescue as it did in 2008."  Nonsense!  Central bankers are magic people.  The new money will be printed and distributed, and the bad debt will simply be loaded onto a hard drive, put on a Tesla rocket, and placed into orbit around Mars.  

Anteater's picture

...and the bad debt will simply be loaded onto a hard

drive, set on an iron collar, and locked with shackles

of shekels around the necks of every US citizen.  


lulu34's picture

"BINGO" !  Makes perfect sense to 95% of recent collitch grads.

24Richie's picture

The number to watch is the debt/GDP ratio.



adolphz's picture

United States to bankruptsy

all-priced-in's picture

But we own it to ourselves so it doesn't count.




Muirchertach's picture

Doesn't include mortgages; but the federal debt doesn't include unfunded liabilities so...

PhilofOz's picture

Government debt, household debt! Whatever debt!! The Rothschild clan owns us all!

aliens is here's picture

I have no doubt we'll go bankrupt by the number of ppl applying for SSDI and how much we are paying the medical consultants to evaluate them applicants. Each medical consultants gets anywhere from $75 to $100 an hour and we have lots in each state offices.

TheEndIsNear's picture

I know someone who is receiving SSDI because of her morbid obesity. Cut the SSDI money and maybe she would lose weight and no longer be "disabled". Paying people to stay so fat they can barely walk is insanity.

Kokulakai's picture

Onward towards infinity.

directaction's picture

Hopefully this entire system collapses soon,

While I’m still young enough to shoot accurately.

whatisthat's picture

Yup all the Congressional morons got us into this message - over the  past 20 years, should be locked up in prison......

Grandad Grumps's picture

I suppose it would not be so bad except the government is not even trying to curtail debt.

Zorba's idea's picture

Well, given all the household debt chasing my family, HC, College tuition, mortgage, (((shrinking)))groceries, transportation, credit cards to compensate for shrinking disposable, neglible savings...I suddenly feel better :/

venturen's picture

Government Debt is now Wall Street ASSETS! 


There should be a 10% tax on Wall Street REVENUE...not profits...REVENUE!