CONSUMER debt doesn't get the same level kind of attention given to the national debt, but it continues to grow at a rate that can't be sustained indefinitely.
Millions of Americans need a financial checkup.
U.S. household debt now tops $12.3 trillion. That is somewhere around $320 billion below the levels in 2008 as the great recession was beginning.
The Federal Reserve reported last week that borrowing rose by $12.3 billion in June after a $17.9 billion increase in May.
Economists don't exactly rail against consumer debt because it accounts for about 70 percent of the U.S. economy. However, financial experts say there are different types of debt that can cause concerns.
Professor Atif Mian of Princeton University recently released a study that shows how nations where household debt rises quickly tend to experience slower economic growth. Mian said that when debt rises quickly it tends to create a bubble. For instance, U.S. home prices rose too quickly before the great recession and when that bubble burst, it contributed to a sharp drop in consumer spending. Last week's financial snapshot showed how quickly debt can rise.
U.S. auto and student loans rose by $4.6 billion in June and that's the lowest monthly increase in that combined category in nearly five years. Credit card debt rose by $7.7 billion, up from $5.9 billion in May.
Lenders and credit-rating firms are concerned about the rising debt. Synchrony Financial, the largest insurer of U.S. retail store increased its credit loss forecast after it noted that more customers are failing to catch up on overdue payments.
Not all debt is bad, but it's a troubling sign when one in seven U.S. households has a negative net worth.
Americans are right to worry that the federal government is mortgaging their future. They should see similar warning signs in their own homes and bank accounts.