As the nation heads toward a debt-ceiling breach on June 1, both policy-makers and the American populace have understandably focused on the state of the federal debt, currently standing at $31.8 trillion. What's been lost sight of, however, is a private debt crisis that is almost as severe.

At $16.9 trillion, total household debt stands at record highs in hard-dollar amounts. (As a percentage of GDP, the current 77 percent is still lower than the 100 percent record set in the fourth quarter of 2007.) Credit-card debt reached a new peak of $986 billion at the end of 2022 and held ...