“There are three kinds of lies: lies, damned lies, and statistics.”

I’m sure you’ve heard this quote, attributed to the British prime minister Benjamin Disraeli and popularized by Mark Twain.

It’s one of my all-time favorite quotes.

The simple idea is that statistics can deceive people easily.

Disraeli meant it in a political context, but you see the same thing in financial media all the time.

The financial media need your attention to make money, so they are looking to make you click anyway they can.

They don’t actually care about the truth as long as they’re getting paid.

I thought about this quote recently when a spirited debate opened up between another editor here at Paradigm and me.

And today, I want to talk to you about it.

$5T in Consumer Credit… Time to Panic?

One of my esteemed colleagues (who is also one of my favorite writers here) shared the following chart from the Federal Reserve Bank.

It shows that “Total Consumer Credit Owned and Securitized” has now grown to over $5 trillion. That’s a lot of money!

Source: Federal Reserve Bank

Looking at the chart, you can see that it has been going up almost non-stop for 80 years. This must be really bad, right?

Well, as is often the case with economic statistics, it depends.

That $5 trillion number is an absolute number, which means it doesn’t tell you compared to what exactly.

Lately, I have been listening to historical podcasts ahead of an upcoming trip to Ireland for New Year’s.

One of them told the story of how the giant Fitzgerald estate produced revenues of almost 15,000 pounds per year, an astounding sum at the time.

But these days, that will barely cover the fine the UK government will charge you for sharing a meme.

This is because the value of the currency has changed dramatically in the last 225 years.

Economic numbers are only relevant to the numbers around them.

Yes, $5 trillion in consumer credit is a lot. But how big is this number compared to our economic output or consumer assets?

Here Are a Few Less Scary Charts

Look at the graphic below that shows the level of household debt relative to the GDP for a number of Western countries. (The dark blue line is the U.S.)

Source: Statista

The first thing that jumps out to me is that the U.S. is doing much better than other English-speaking countries like the UK, Canada and Australia.

Look closely at the chart, and you can see that the U.S. household debt ratio is actually trending down — and has been for almost 20 years!

It appears that the household debt ratio peaked around 2007 and now sits at levels we last saw in the late 1990s.

Remember, this doesn’t have anything to do with the stock market or housing prices. It’s relative to our economic output.

Now, let’s look at debt relative to assets. Here’s a chart from a Federal Reserve report showing the value of all of the assets and liabilities held by Americans.

Source: Federal Reserve Bank

Wow! Americans have been doing really well with their assets. That number is almost $200 TRILLION.

The debt (liabilities) has also grown, but at a much slower pace. That’s a bit less than $20 trillion.

In that Fed report, it says that at the end of the second quarter of 2025, the U.S. household debt-to-asset ratio (debt as a percentage of wealth) was approximately 11%.

It notes that this is a 50-year low!

The fact is that the growth in assets has far outpaced the growth in debt.

The long-term average is around 12%, and this ratio peaked during the global financial crisis at more than 16%.

Do either of these analyses mean it’s good that U.S. household credit and debt are at all-time highs?

No, not necessarily.

However, given the context of the rest of the picture, that fact by itself is not a reason to hit the panic button…

No matter how much the mainstream media wants you to click!