What's the evidence that high deficits work?
Is there a "Day of Reckoning" on the way?
How is this not a clear indication that our past debt is imposing a net cost overall rather than an overall benefit?
It's not a clear indication of that because standards of living continued to increase over all those decades of increased past debt.
Standard-of-Living increase?
Only because of new science and technology, which has increased geometrically during this period. If the higher-debt practices adopted in the 1930s had produced net benefit, we should have been seeing a different outcome than one which makes us subservient to ever higher debt with no end.
(Also, the "higher standard of living" argument ignores complaints that the prosperity is very unevenly distributed and that much has gotten worse = lower living standard for segments of the population. Also, the higher U.S. trade deficit is probably a RESULT or sign of something wrong in the production, indicating something went wrong, not with trade policy but with U.S. market competitiveness in relation to other countries, which then produces trade protectionism demagoguery leading to still worse results. So some things are wrong, despite the better standard of living, and thus it's not clear that the higher-debt philosophy is producing the better results.)
It's not necessarily wrong that we've transitioned to an economy with annual budget deficits as being the norm -- i.e.,
moderate deficit like around 5% of the current year's budget. It could possibly have worked. But it should be the kind of change which does not enslave us to ever higher debt from now on with no option to ever stop it or reduce the level of debt down again, imposing the absolute necessity of higher debt forever because each generation is unable to repay the previous obligations without increasing the debt and thus passing on its share to the future in the form of still more debt.
90 years of this is too long! This slavery to debt indicates a net failure, or breakdown, in the original formula for instituting high budget deficit to play a legitimate role
accompanied by good economic production of more wealth to also repay debt, i.e., private production through basic competitiveness and risk-taking and improved performance by individual players in the market.
I.e., a good formula would be one which makes the system perform a little better, but not which enslaves the system to the new irreversibly-higher-debt formula which then becomes absolute and binding, with no choice to ever go back or reduce our dependency on it.
(It's necessary to clarify that it's only
high budget deficit which is a false economic policy choice doing harm. This policy is a CAUSE of other damage in the economy, whereas the so-called TRADE DEFICIT is itself never a CAUSE of anything wrong, but only a result of something wrong in the production process, such as uncompetitiveness. It's only debt which has to be repaid which causes harm, not a trade imbalance where there is no debt owed by the importing nation to the exporting nation.)
What really causes increased living standard? -- clever monetary tricks played by the Fed? cute new money-creating theories by Keynes and Galbraith and other Economics Wizards? No.
New science and technology is by far the obvious cause of higher living standard, not games played by the politicians and economists pretending to manipulate the money and create instant wealth with their magic tricks.
Scholars in the social sciences put on this charade that somehow their expertise in how to manipulate society is what causes our improvements in health and industry and production and wellness. This enhances their prestige and recognition and wins them Noble Prizes and higher salaries in the academic world.
But their real role, along with philosophers and clerics and prophets and gurus and orators and pundits -- and their disciples -- is as ornaments or luxuries within the advanced cultural and material benefits due to modern science and technology and industry. They are a BY-PRODUCT of the higher living standard, NOT A CAUSE of it.
Did any smart economic theories ever really work?
Probably the best case of an economic policy leading to greater prosperity is that of promoting
trade, as history shows repeatedly that the more prosperous countries are those which trade more. The Phoenicians proved the benefits of trade to increasing the general well-being. Their "capital" city of Tyre was arguably the most prosperous ancient city, in terms of the overall living standard for the whole population. Historians and economists agree that increase of trade played a major role in promoting the general well-being, while the xenophobic and/or more isolated regions which did not trade had slower development and more poverty.
But along with trade promotion, another in the list of economic theories which can claim credit for producing improvement would be that of market
competition as essential for setting the prices; so some (but not all) of the Adam Smith and David Ricardo theories of market capitalism deserve credit.
But whatever there are of legitimate social-science make-the-world-better theories, social revolutions, social planning, utopian reformism etc., they are nothing compared to the role of the scientific and technological advancements to improve the world and make possible our higher living standard.
There's little evidence that anyone's brilliant social theories or political/economic school has had a net positive effect on our living standard -- any evidence probably shows as much negative outcome as positive. It's impossible to prove what caused what. All we know is that the natural sciences have made our lives better, and no matter which political ideologues were in power, they made little or no net difference (aside from their "putting out the garbage" role), except the funding of needed science research. In practice the Left fanatics and Right fanatics often canceled each other out, so that if either caused something good to happen, the other side nullified it when they came to power at the next election. There's little or no evidence either way, other than when they chose the benefits to be gained by science.
You could make a good argument that all the political back-and-forth of the Reds & Blues is symbolism only, and instead we should promote science for anything serious, and maybe just laugh off the Red and Blue speechmakers as clowns to entertain us. Perhaps they are a necessary evil.
A similar collection of preachers pretending to take credit for progress are the cap-'n-gown speechmakers who accost us with long speeches every year, mainly in June, promoting their social philosophy and pretending to inspire our high school and college grads to advancement in their careers with a new bounce in their step, to lead the next generation on to higher and higher levels of consciousness -- especially at the top 1% Ivy League institutions where our "leaders of tomorrow" come off the assembly line packaged and clothed in the latest robes of political correctness and symbolisms and fads to make you find your "identity," or discover "who you are" or feel good about yourself. Similar to the politicians, these speech-makers are probably a necessary evil which serves a legitimate psychological function in society, especially when they emphasize the importance of science.
Sure, there may come a day of reckoning [because of too much debt], but . . .
There are possible "day of reckoning" scenarios, depending on many unknown factors. Maybe you could say the chance of any real disaster is only 20% or 30%, so let's not worry about it. Like the chance of having a car accident is maybe only 10%, so why bother wearing a seat belt?
. . . but I am having a hard time envisioning who/whatever is owed all that theoretical debt, suddenly showing up and demanding that the entire debt be cleared immediately.
No one demands anything immediately, other than the particular current bondholders who must be paid on schedule, by the deadline agreed to in the contract. And the entire debt owed to them must be paid on schedule -- everyone agrees to this.
So the question is not whether but how this is to be repaid, on into the future, 20 and 50 and 100 years from now, when it's due. And we're making the future worse as long as we have no answer other than the infinite borrowing ability of future speech-maker demagogues in power who can run up however much more debt is required at the moment. The increasingly higher debt/GDP indicates that this remains the only basis for the future repayment of debt, so our higher-debt philosophy is premised on the need for ever and ever-higher debt ratio. The production share of repayment continues to decrease as the new-debt share continues to increase. This ratio is now the highest ever, probably even the highest ever in history over a sustained period -- not for the U.S. alone, but the U.S. is a leader in this trend and is setting a bad example for many countries having much worse inflation problems and less flexibility to manage long-term debt. So even if the U.S. has ways to avoid a "day of reckoning" disaster itself, many other countries do not, and we don't know what effect those disasters might have on the U.S. or other developed countries.
This adverse trend would not be happening if the new unlimited debt philosophy adopted by the U.S. in the 1930s was producing an overall net benefit over time. Such a benefit ought to lead to a system of repaying the debt with higher production instead of with only higher debt without limit. Arguably this debt philosophy could have become successful if it had been brought under control in the 1950s and 60s and made only a modest part of financing the budget from that point on, instead of becoming a major doctrine to permanently drive up the debt commitment as far as possible into the future. All the projections show the debt/GDP likely to keep increasing significantly. Only a major shift or change in debt policy could change this. So this debt philosophy inherently is based on ever-increasing debt/GDP with no decrease as part of the formula.
. . . showing up and demanding that the entire debt be cleared immediately. That would be imposing a cost!
No, there'd be no such cost because the demand simply would not be met -- of course no one making such demands would ever show up, but hypothetically if they did, they'd be turned away empty-handed -- because nothing needs to be "cleared" other than to pay the debt currently due.
But what could happen, in a disaster scenario, is that new bond-buyers would be scared away by something, and raising new debt would become impossible, or extremely costly. If that should happen, the much higher debt/GDP could make it impossible to resolve it (too much is owed), and the extreme budget-cutting outcries then, worse than ever, would be the result of our having failed to keep down the debt/GDP and letting it rise without limit, as the "raise the debt ceiling" crusaders keep insisting we must do.
Of course you can always say it's less than 50% likely that any such disaster will happen, so let's not worry about it, just like the chance of a car accident is less than 50% and so there's no need for the seatbelt.
A case could be made for that.
Which Party is really to blame for the debt?
When was the last budget surplus year? I don't know, but I suspect it was during the Clinton administration.
When Gingrich and Republican Congress heroically restrained spending so they could claim credit for balancing the budget. Right.
Your example helps confirm the principle:
Republican President + Democrat Congress = higher debt
Democrat President + Republican Congress = reduced debt (or less increased debt)
But of course we have to remember that it was the tech boom of the 1990s which really produced the higher revenue to the gov't, not the smart policies of the Dems or Repubs. Though it could be argued that the Dem President + Repub Congress contributed slightly.
summary: We should rely on what we know works, not on unproven mystical money-manipulation to "grow the economy" and "create jobs" and other magic-wand slogans not based on economic fundamentals of improving performance in the market. Basic increasing of some taxes is part of the solution, and also budget cuts. And promoting science, such as more research for finding real solutions that improve how we live. We have no real evidence that the higher-debt magic is working, after 90 years of steady growth of debt-dependency, but we know there is risk of something going wrong if we keep running up debt so that the future is enslaved to debt-dependency and no option to reduce that dependency -- which is where we're heading. So we need some mechanism for choosing to reduce that dependency, and we have no such mechanism other than the debt ceiling.
If the query turned up a useful graph or page why not ... I dunno ... LINK to the useful graph or page!? 
