Private Debt 2012 (8): Smoke 'n' Mirror, Smokin' Gun

Based on "Total Credit Market Debt Owed" (TCMDO) from FRED, the Federal government's share of debt (in red) and everybody else's share (in blue):

Graph #1: The Federal Debt is a Wisp of Smoke

The blue line is our share -- private sector, mostly. The red line is the Federal share.

The Federal government's share really can't get much lower. Oh, it could drop from 20% of the total, back down to 10%. But that's where it was when our recent troubles started. So maybe that's not such a good idea.

As a matter of fact, the Federal debt was at its lowest on this graph for pretty much the whole first decade of the 21st century -- and that was the time of the weakest economic boom we ever had!

Oh, to be sure, the Federal government had a lot of debt at the time. But not compared to the rest of us!

Some things cannot be said often enough. Excessive private debt is the problem.