Well, I'm digging up and old thread and chiming in because this is something about which I know a little.
The absolute level of debt isn't meaningful - as bloomberg points out, debt in relation to GDP is what matters. Our country has grown its GDP for the last 3 decades on debt. This administration has grown debt as any government would to stem the worst of a terrible economic situation. The trend of our growth in GDP via debt began with the fall of the $ under Reagan. We began exporting our jobs overseas, and how our economy is 70% based on consumer spending. The problem (IMO) in our debt situation is not the line item veto. That's pennies compared to the problem of trillions.
First chart for you:
http://img.photobucket.com/albums/v3...ypresident.jpg
Republicans are in red, Dems in blue. Shows start GDP/Debt at the beginning of the term, and GDP/Debt at the ending of the term, the increase in debt, and the increase in debt/GDP. Note how things change with Reagan in office.
FAR scarier is the TOTAL credit/GDP (not just government debt). Since the 1800s to the early 1980, this number average no more than 200% (other than during the great depresssion, and thre the problem was not so much an increase in debt, it was massively falling GDP):
Bottom-line: the developed world has doubled its debt load over the past 10 years (from $25 trillion to $56 trillion); our debt doubled in the 90s as it did in the 80s. To continue this trend, debt would need to increase to $104 trillion over the next decade, adding - you ready?
$5 trillion a year.
Debt began to rise exponentially during the Reagan administration - coinciding with an era of deregulation of the banking sector. Yes, our GDP has been rising steadily (for the most part) - but our debt has been rising six times faster (our debt as a nation, not just the government).
Here's where things get sticky - the decline in the savings rate also began to fall off a cliff in the early 1980s. I am NOT stating causation, merely correlation. But this does coincide with the falling doller (in real terms), and the falling long term interest rate. This is when the baby boomers started moving into homes - and considered those homes part of their savings. This is called the "wealth effect" in macro economic theory. The idea is that an increase in consumer spending results from a perceived wealth created by the escalating value of assets - like homes and the stock market.
Anyway, here's that chart:
I've got more charts there if anyone wants them.
As a country, not only have we been failing to save - the flip side to that coin is that we have been consuming more than we produce. This can CLEARLY be demonstrated by our trade deficit.
Again - note how it takes off in the early 80s. It does fall back there for a while in the 90s, but starts to really take off when U.S. corporations really started moving outsourcing to The People's Republic of China, India, Indonesia & etc. To fund U.S. consumer consumptoin, we have been borrowing the difference from foreigners. The PRC (PLEASE people, STOP calling it "China." It is a communist country and let's not let propoganda make us for get that!!!!) is the largest owner of our debt (weighing in with 22% of all foreign purchases of U.S.) because they CHOSE to basically subsidize our consumption. Our loss is their growth. Gary and I have warned repeatedly (you'll find discussion of it in these forums) that allowing the PRC to subsidize our consumption would result long term in either the destruction of the dollar or their ability to put us in an economic stranglehold, and potentially both.
Clinton paved the way, encouraging "China's" entry into the World Trade Organization, and Bush signed the bill. I mean - "China" is an "emerging economic power" (about to become the second largest economy in the world if it isn't already), an engine of world economic growth, bursting with new consumers. "The People's Republic of China" is a communist country that works on five- year plans, reports convenient not real numbers, controls its currency with a tight fist, is facing labor unrest on a scale unheard of in the West, and kills 1000s of individuals a year with hardly any safety regulations in place (not to mention what they're doing to their environment. 24% of LA's smog on any given day is FROM THE PRC!!!).
Sorry, I digress.
The point is that with our foreign borrowing came the export of our jobs. It could not happen any other way if we weren't saving enough to fund required investments, period. But we didn't just move our jobs overseas - we moved entire factoris. We disassemblied our mills, put them on ships, and literally shipped them to other countries., Our actual sources of wealth generation - our sources of production - were moved offshore
So what does this mean? Debt is a claim on the future. Yet future cash flows cannot be continuously borrowed. There are three options:
1) Cash flows must relfect actual production, and at some oint, the cash flows must suppport future debt servicing costs (we pay down the debt);
2) Default on the debt;
3) Inflate the currency.
I'll scare you with the rest of the thinking in some other post if it is ever appropriate in IMO, but the least painful way for the U.S. consumer to "beat" this economy is to inflate - and that means that we will likely exceed 100% of debt/GDP.
Both parties have been at fault for that one - and both party's Presidents have signed those budgets with way too much pork in them without batting an eye. Both parties have also used Pork as a talking point during elections and then gone back to business as usual when they got back to Washington. Both parties have been spending above the country's income for decades. Guess none of them had to balance their own personal budgets. 
