While government debt has been dominating the news, there is far more private debt than public debt in the U.S. economy–and it represents the greater economic challenge. As of year-end 2022, public debt totaled 123% of GDP, while private sector debt totaled 165%.
The level of private debt–student debt, mortgage debt, small business debt, and more–has more than doubled as a percentage of GDP since 1980. It stifles economic growth because it burdens individuals and businesses. In fact, debt has been consistently growing faster than GDP, which means that the burden on the private sector is almost always increasing.
