Want to see something distressing? Let me show you the outstanding consumer credit of the US federal government according to the Federal Reserve.

These numbers include student loans originated under the Federal Family Education Loan Program and the Direct Loan Program, Perkins loans, and private student loans without government guarantees. These numbers also include loan balances that are not included in the non-revolving credit balances reported by the Federal Reserve.

The US government has crossed over $700 Billion in outstanding consumer credit (by its definition, non-investment credit for the purpose of consumption of goods and services by the borrower). These numbers were around $100 Billion just five years ago.

To put this into perspective, JPMorgan Chase’s entire loan portfolio was about $729 Billion last quarter.

To further put this into perspective, the market caps of Visa, MasterCard, Discover, Citi, JPM Chase, Capital One, and American Express combined are just under roughly $800 Billion. The US consumer credit program is equal in size to the publicly traded shares of all of these companies put together.

If something should happen to this loan program – if, for instance, these loans should have happen to been made under shaky, high risk terms to people that cannot repay them – the resulting blow would be similar in scope to a company the size of the largest banks going under or, if you prefer this imagery, the shares of all the aforementioned companies trading to $0.00.

Have a nice day.

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