Editor's note: Will Cain, a CNN contributor who appears on "In the Arena" weekdays at 8 p.m. ET, is a media entrepreneur, small-business owner and host of "Off the Page" on National Review.com. Contact him at firstname.lastname@example.org
New York (CNN) -- This is the only number that matters: 350.
When you're talking about the economy, start the conversation and end the conversation with the number 350. That number reflects the total debt Americans and their government owe as a percentage of the gross domestic product, the total of everything produced in the country. That number is what's killing the U.S. economy.
Each month recently, we've been bombarded with bad numbers: Only 54,000 jobs added in May, unemployment at 9.1%, housing prices down 33.1%, and on and on. These numbers, though, are all symptoms. If we continue, every 30 days, to focus on these numbers -- well, we're like the doctor of an AIDS patient who can only see his patient's lesions, pneumonia and bronchitis. Yes, each one of those can kill the patient, but he'll never get better until you focus on the underlying disease. Debt is this economy's AIDS. And that debt is represented by the number 350.
We spend a lot of time talking about federal government debt. But the debt I'm talking about reflects -- yes, federal government debt -- but also, more importantly, business and household debt. Over the past 20 years, the U.S. private sector -- consumers and businesses -- has taken on historic levels of debt.
Take a look at this chart (click on it to enlarge):
Essentially this chart means that every neighbor of yours is sitting on a pile of debt (most likely living in it -- in an upside down house) and can't spend. In turn, banks are sitting on portfolios of bad debt -- potential defaults -- and hoarding cash. In turn again, businesses have no interest in hiring, investing or spending in a world of uncertain buyers. There's your economic recession ... stagnation ... potential depression ... right there.
For historical context consider this: In the 1870s, (the Long Depression) debt-to-GDP reached 166%.
In the 1930s, (The Great Depression) debt-to-GDP reached 300%.
Again, today, debt-to-GDP is 350%.
Deleveraging -- or working off all that debt -- is a must for the economy to move forward. Besides, it's not like we have a choice.
A 2010 McKinsey study found that long periods of deleveraging -- periods of six to seven years -- followed nearly every major financial crisis since World War II. And this isn't your everyday "credit-bubble-turned-major-financial-crisis."
There is simply no pretty way to work off all that debt. You can print money and inflate away the debt, which won't win you any world popularity contests.
You can take the laissez-faire approach and allow for massive defaults, which could suck the economy into depression. Or you could muddle through, hoping GDP outpaces credit growth, which could take a really long time.
Regardless, deleveraging is an enormous economic drag. So much so, that in his 1933 article "The Debt-Deflation Theory of Great Depressions," Irving Fisher said the negative effects of debt reduction trumped all other economic factors put together. It's the only number that matters.
We've already reduced the debt from 370% to 350% over the last three years. But right now, too many people are treating the recent recession as though it's your normal, once every decade, recession. The numbers above suggest that this is not your daddy's recession. The numbers above suggest this will be long and hard. We could start by focusing on the right number: 350.
The opinions expressed in this commentary are solely those of Will Cain.