Great Graphic: US Debt/GDP Long View

This Great Graphic comes from the Atlantic.  The US public debt that that chart tracks is federally publicly traded debt. It stood at $11.4 trillion last week and does not include the $5 trillion of debt that the US government owes itself via the trust funds, like Social Security.  

The large fiscal overshoot of the "Great Recession" was a function of both the collapse of revenues as well as a sharp increase in spending.   

Stronger growth would help reduce the cyclical adjusted deficit, but the underlying problem is more structural.  In effect, the clash between the two main parties in the US has resulted in a broad stalemate, where each side, in effect, got what it wanted:  low taxes and increased government outlays.  Those outlays, which are ideologically labeled as entitlements, are really the basket of goods/services that the sovereign provides to the citizens.   They were mostly won after years of debate and campaigning.  

We have suggested that capitalism is about relationships, and on the other side of the crisis many fundamental relationships will be transformed.  The relationship here is the relationship between the citizens and the sovereign.  What basket of goods/services should citizens receive and how are they financed?   At the same time, it must be recognized that the basket of goods and how it is financed over time may change. 

This is not a purely economic question of course as the relationship is not simply governed by the cash nexus.  It is about politics and power as well.  It is also about values.