Since the mid-1980s, a giant electronic odometer perched atop a Chinese restaurant in New York has startled passers-by with a running total of the US national debt. Indeed, last year the billboard faced a millennium problem of sorts when it ran out of decimal places and temporarily shut down.
But it is no longer the historically profligate US government that lives on borrowed "dime". At the same time as the government cuts back on its borrowing in an era of budget surpluses, American households and businesses are borrowing at an unprecedented rate.
The trend has been an important driver behind the economic boom of the late 1990s, fuelling consumer spending and helping finance companies' aggressive expansion plans. However, a growing number of people are starting to worry that it has also left companies and householders exposed to a future economic downturn, and could greatly deepen its intensity.
Already, interest rates are moving sharply higher - the yield on the benchmark 30-year Treasury bond is at levels not seen in two years - and many companies could face a tougher time refinancing the debt they have accumulated. According to figures issued by the Federal Reserve, the level of federal debt fell by a 2.2 per cent annual rate in the third quarter of last year, continuing a two-year trend. During the same period, household debt rose by 9.2 per cent, while corporate debt shot up by a blistering 11.5 per cent rate as companies tapped banks and the bond market.
In 1999, US corporations issued about $670 billion (€651 billion) in bonds according to preliminary figures from the Bond Markets Association, while the Loan Pricing Corporation reports that companies tapped the syndicated loan market for $1,017 billion. Overall, corporate debt now represents 45 per cent of the country's gross domestic product - the highest level ever.
"If this pace of debt growth continues, it very much becomes a concern," said Mr John Lonski, chief economist at Moody's Investors Service, the international credit rating agency.
How did US businesses and households get so indebted? Low interest rates have encouraged companies to turn to banks and bond markets for relatively cheap financing, often buying back their own shares in the process. Householders have refinanced their homes to raise extra cash, helping to fuel the spending boom.
Optimists say it's still too early to worry about these trends, noting that both corporations and households are in a relatively good position to pay it back. Furthermore, many say the present growth in borrowing is an entirely natural and necessary feature of a maturing economic cycle.
But even today, in the midst of a record economic expansion, there are signs that creditworthiness is on the decline. Last year, Moody's downgraded nearly twice as many US companies as they upgraded, and corporate defaults nudged towards a record of their own. For some, those developments loom as a warning sign on the horizon, should the surging US economy slow.
"If, for whatever reason, profitability were to falter in the year 2000, it would almost necessarily follow that we'd observe a further erosion in credit worth," Mr Lonski says.
"You could be reaching a point where the loss of credit worth might begin to impinge on the economy's overall performance."
