United States is rich beyond dreams but at the same time swimming in debt, the latest figures released by the US Federal Reserve show.
Rising house and stock prices have pushed the total net worth of US households to a record $44.41 trillion at the end of 2003.
However, the nation's debt also grew at a rapid pace in 2003. It increased by some $1.7 trillion to touch $22.4 trillion, the figures said.
Creditors abroad financed about a third of the year's borrowing, roughly 5 per cent of the nation's total output of products and services.
Such heavy indebtedness, says Allen Sinai of DecisionEconomics, a consulting firm, "is a time-bomb issue. There are potential adverse consequences, but we don't know when."
Debt can hobble the economy, said Sinai, author of a recent study on the dangers of ballooning budget deficits along with Robert E Rubin, former Treasury Secretary, and Peter Orszag, a Brookings Institution economist.
Sinai said that the household balance sheet seems sound only because the price of household assets, like homes and stocks, are high and interest rates are low.
Federal Reserve chairman Alan Grenspan declared he was at a loss to explain how a corrective could be applied. He asked, without providing an answer: "Can market forces incrementally defuse a worrisome buildup in a nation's current account deficit and net external debt before a crisis more abruptly does so?"
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