I'm old enough to remember when credit was just something you verbally gave to someone for doing something well. I remember when the catch-phrase "Buy now, pay later" became popular. Prior to that time, most Americans either paid cash for goods or bought them on "layaway", meaning they paid for them over time, then got the goods when the last payment was made.

It appears that Americans have not reacted well to easy credit. I'm not going to preach about this, because at several times in my life, I've gotten over-extended myself and had to gradually dig my way back out again.

I no longer use credit of any kind... easy when your credit report is as messed up as mine is. Having a name like Robert Smith results in many credit report entries that have nothing to do with me... some of them good, some of them bad. At one time, my own bank had a car loan in my name, with my social security number... but it wasn't my car or my loan. It's actually a relief to have no credit available, but incredibly, I could still get approved for a home mortgage. That's pretty good evidence that excessive credit is available to almost anyone, and it appears that most of us are availing ourselves of that opportunity:

According to the latest figures from the Federal Reserve, America's consumer debt has topped $2 trillion for the first time, continuing what debt experts view as an alarming surge in recent years.

Tied to the record consumer debt levels has been a surge in personal bankruptcies, which reached an all-time high of 1.6 million households in 2003.

The figure covers most short- and intermediate-term credit extended to individuals, including car loans. It excludes loans secured by real estate, such as home mortgages. When mortgages are taken into account, the nation's households owe close to $9 trillion.

The $2 trillion figure represents a doubling of America's consumer debt in less than 10 years. According to the Federal Reserve, the debt topped the $1 trillion mark for the first time in December 1994.

If Americans are being rational about the use of credit, it must mean that they have great optimism for the future... figuring that they will be steadily employed and that the economy will improve. Or... is it possible that we've just gotten so used to living well that temporary setbacks are being offset by the desperate use of credit to maintain a standard of living? Perhaps it is the relatively easy out of declaring personal bankruptsy that leads people down a path they should know they can't maintain.

Whatever the truth about those issues, here's another truth that should give all of us pause. If Americans are stretching their personal finances to the breaking point, our government is way out in front of us.

On Monday, President Bush proposed a $2.4 trillion budget. That will probably get bumped up even more by Congress, and there will undoubtedly be more Iraq war costs added to it.

2.4 TRILLION DOLLARS!

For each American worker, that's $13,333 for the year. $1,111 per month, $37 per day.

$6.41 for each hour you work, going to pay for just your federal government. Are you getting that much value in return? I can't imagine how, but you'll have to answer that question for yourself.

I invite you to again consider what I wrote on January 29th in formerly Made in America - part 2  about that gross government cost resulting in the loss of jobs to other nations in the form of outsourcing, and the loss of whole industries who can no longer afford American workers.

It's a tribute to the energy and productivity of American workers that we can carry that enormous governmental financial load. I hope it's obvious to you that it cannot continue indefinitely... obvious that it will inevitably come crashing down around us. When it does, none of us will be immune. Ask someone who lived through the early 30's.