"On Borrowed Time"
Household debt from one End of the Americas to the other...
by Joel Bowman
“Change is the only constant.”
~ Heraclitus (c.535 – 475 BC)
Buenos Aires, Argentina - "There’s a saying down here on the Pampas: Go away for a short time and you’ll come back to find everything changed; leave for a long time and you’ll return to find everything the same. Though Borgesian in tone, the apparent paradox makes perfect sense once you’ve witnessed the sudden, sometimes violent upheavals here. The mood changes quickly, from apathetic to alarmed, composed… to concerned… to full blown crisis mode. There’s a run on the banks, say… or the national football team was beaten in round one (by Saudi Arabia!)… or, most likely, the currency is suddenly in free-fall… again. Indeed, when it comes to phony fiat shenanigans, change (in the form of currency devaluations and the ever-present threat of hyperinflation) is the only constant.
When we moved to Argentina, a decade and a half ago, a 100 peso bill was plenty sufficient to cover a dinner for two... with appetizers, juicy Argentine steaks, coffee and deserts, plus a bottles (or two) of delicious malbec and a generous tip. This morning, that same 100 peso note is worth about 7 cents. The largest bill currently in circulation is the 20,000 peso note. In 2010, that would have been worth $5,750. Today, it is worth about $14.
Creative Accounting: You can imagine what that means for anyone trying to do business here… the “creative accounting” that has to go into pricing goods and services, forecasting and budgeting costs, managing inventory, meeting payroll, maintaining employee contracts, and plenty more besides… all without access to credit. And yet, a certain degree of exposure to such suboptimal circumstances can antifragilize a population. For one thing, most people here don’t carry a whole lot of debt. Household debt, for example, is practically non-existent. By way of comparison…
According to the latest BIS and IMF data, household debt as percentage of the size of the overall economy in the United States stands at about 70-75% of GDP. That is, dividing the $18.5-18.6 trillion in total household debt (per the Federal Reserve/New York Fed’s Q3 2025 figures) by the size of the US population (~340 million) equals roughly $54,000-55,000 per person.
Here in Argentina, the latest available figures (CEIC data for late 2024), shows total household debt equal to roughly $28-30 billion, or about 5% of GDP. Shared among a population of ~46 million, that comes to about… $600-650 per person.
Measured purely in total dollar terms, the average American’s personal debt load is about 85-90 times higher than an Argentine’s. Of course, Americans and Argentines don’t earn nearly the same amount of dollars… but even adjusting for this discrepancy we still see a gaping chasm.
In the US, the median annual salary for full-time worker at $63,000, meaning the average American carries almost a full year’s work (11 months) in debt. With an average of salary of $1,000 to $1,200 USD per month (the median for registered private workers in Argentina, according to the latest from INDEC), the average Argentine carries… about two weeks worth of debt.
Doghouse to Penthouse: The figures are even more alarming for other, highly indebted nations… South Korea’s household debt to GDP stands at 91.7 %… Canada’s comes in around 99–100 %… and topping the charts, Australia’s household debt weighs in an an eye-watering 113% of GDP (meaning, in simple terms, for every A$100 Australia produces in a given year, households on average shoulder about A$113 of debt…mostly mortgage loans).
In many ways, Argentina is still very much a tabula rasa, with vastly underdeveloped credit markets on the one hand… and enormous “collateral/equity” in the form of vast and untapped natural resources on the other. Where other nations have extended themselves, arguably beyond their means, Argentina has spent the past several decades in the proverbial doghouse, locked out of international markets and sleeping on the sofa. And yet, as we’ve been following in these Notes, that wheel is changing too… such that a traveler returning here after a long absence might well find everything changed, and much for the better…"
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