Private debt has tripled over the past seventy years. In 1950, private debt was 50% of GDP; in 2020, private debt stands 150% of GDP. For every $1 of national income, about $1.50 is owed by households and businesses.
The chart and text below are from the St. Louis Fed:
“Debt is generally categorized into two types: public debt and private debt. Public debt is the debt owed by national, state, and local governments. Private debt is the debt owed by households, businesses, and nonprofits, which are also called private nonfinancial entities. Private nonfinancial debt excludes borrowing by the government or financial firms, such as banks.”
“Figure 1 shows private debt over time as a percentage of U.S. gross domestic product (GDP). GDP measures the value of all new and final goods and services produced in a country in a particular year and is an indicator of the income of that country. Therefore, Figure 1 measures U.S. private debt divided by the U.S. income that generates the ability to pay off that debt. “
Figure 1. Outstanding Debt in Nonfinancial Sectors, Percentage of GDP
Source: Bureau of Economic Analysis and Board of Governors of the Federal Reserve System. FRED®, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/graph/?g=pGPd, accessed January 2020.