Alex Brandon, AP
FILE - In this Dec. 17, 2010, file photo House Speaker-designate John Boehner, R-Ohio, talks with media on Capitol Hill in Washington. The issue of the nation's debt has been discussed but few have examined household debt.

The problems in front of households in negative equity could be more damaging to the economy than bank or government debt, according to Christopher Goodfellow in an article on Business and Finance.

The public uproar about mortgage relief is important for two reasons — it points to both a societal failing and insinuates there's an underlying issue that hasn't received attention, according to Business and Finance.

Up until now the focus of the debt crisis in Europe has been on the governments' key metrics debt-to-GDP ratios and deficit levels. The preoccupation with debt in the public sector is troublesome because it has blanketed a central part of a continued economic recovery: the deleveraging of private-sector debts, an area in which Ireland is horribly exposed, according to the article.

Even though the spotlight has been on Greece, Ireland's debt problem is a lot bigger.

The sum of all household, company, bank, and government debts in Ireland was 663 percent of GDP in the first quarter of 2011, according to Business and Finance. This fact has been given only a tiny amount of attention by policy makers.

Part of the reason for this is because it's hard to tell determine if a nation's complete indebtedness is a good barometer for its sustainability, according to the article.

A key point is that private sector debt needs to be serviced in some way by the product of the economy. Private sector job cuts, lower wages, and government spending cuts all serve as a trap to consumers, according to Business and Finance. These factors make it difficult for there to be upward movement in consumer spending.

At the beginning of 2011, household debt was 124 percent of GDP, compared to 82 percent in Spain, and 62 percent in Greece, according to Business and Finance. Since the start of the 2008-09 financial crisis, overall debt levels have risen in most developed countries.

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