A look at the U.S. debt bomb

"U.S. consumers have finally stopped borrowing more money each quarter. In fact, they're actually starting to reduce their debts.

If this process continues--if consumers get their debts down to reasonable levels--it will eventually make the country's primary economic engine, shoppers, stronger and more sustainable.

Meanwhile, however, the economy is being sustained by one huge borrower that is taking on debt faster than it has anytime since World War 2: The government. Government spending and government lending is REPLACING private spending and lending. And if it wasn't, the economy would have collapsed.

The government can't keep borrowing like this forever, though, or we'll become Argentina. So the hope is that consumers and businesses will start borrowing BEFORE the government has to get itself under control. The history of financial crises suggests that this transition is unlikely to be smooth."