"A lot of people look at simply the raw dollar amounts, so they look at, for example, the federal government with $8 trillion worth of debt. They may look at households with $30 trillion worth of debt. And they look at how that’s changed over time, and they say, 'My gosh, we are simply going further and further into debt,'" says Dr. Walden, a professor of agricultural and resource economics.

"But economists argue that’s probably not the best way to look at debt -- in fact it probably gives you more heartburn to look at it that way. What you want to realize is that while debt is going up, so is our ability to pay.

"And so what you want to do to see if increases in debt are really becoming more burdensome is to look at how that debt has increased relative to the ability to pay income -- whether that’s income for the government or for an individual.

"Even more importantly, you want to look at the debt service payments –- that is, how much it’s costing you to service that debt (carry that debt) as a percent of your income.

"And when we do that, especially for households, we get a much better picture. We have not seen that households become overburdened when we look at their debt service as a percent of income."