It will be interesting to see where this chart goes in 2009-2012.[/quote]
Actually, that one is a little misleading because it does not add total debt. Here is a better one. And this is not counting the “modifications” in how we measure GDP that have slowly skewed things over the years.
As we can see on this chart, the last time debts got even remotely close to current levels was back in the early 1930s, and that bears a bit of explanation. The debt-to-GDP ratio back then didn’t start to climb until after 1929 (blue arrow), because debts remained relatively fixed in size, while it was the GDP that fell away from under the debts. With the exception of the Great Depression anomaly, our country always held less than 200 percent of our GDP in debt (green circle). In 1985 we violated that barrier and have never looked back.[img_assist|nid=10668|title=Debt to GDP|desc=The grand experiment…|link=node|align=left|width=754|height=500]
