But if you go back further why did that happen? All the great society programs of the 60s are what ran up the debt. The notion that we're so rich we can just government program ourselves out of very thorny problems by giving people money. I'm not necessarily saying that doesn't work or isn't good. But it does cost a lot.
Why did we think we could do that? The new deal maybe? I don't know. It didn't bankrupt the country and it did give people jobs.
You could probably keep going back further if you wanted. Presuming that you know the exact date and time that the fall was precipitated is fun but not intellectually honest. Everything tends to build off of things that came before until it all falls apart.
This was a huge hit that helped to spark runaway debts and inflation, to be sure.
But I'd go further back and say The Fed. It did more than anyone to give us the roaring 20's and the great depression.
More to the point, what's the actual evidence that the debt is a problem, and more of a disadvantage than the advantages of funding the various programmes and tax breaks that have arisen as a result?
We were starting into it. Inflation was increasing, and hit 21%/year. It might have continued increasing, except for Volker. It cost a double-dip recession to reign it in.
Eyeballing this chart http://www.tradingeconomics.com/united-states/inflation-cpi that 21% appears to have been at the end of WW2?
The problem with trying to inflate your way out by adding debt is that profitable debt (eg when it is repaid!) is always longterm deflationary. Ultimately, the debts are either defaulted on, the rates reduced below average inflation, or $ are printed to pay them off.
People who hold lots of money hate inflation! They (banks) like deflation and increasing debt. A functional economy (due to human nature and our monetary system) seems to require a bit of inflation so everyone else would probably be happy with a bit of printing. If nothing else, it's the cheapest way to tax the population of $ holders that you'll every find.
We will look back and marvel at the myopia of the global "boomers".
All of the events that came after (the boom/bust cycle, abolition of the gold standard) were a natural result of that decision.
you think leaders from the early to mid-80s are responsible for debt levels more than doubling over the last 2.5 decades? put down the partisan pills.
Not to make a massive dissertation: just look at the debts everywhere, how nicely exponential they are...
So I'mm sitting here, waiting for the inevitable collapse, hoping it comes sooner than later (so there might be a slight chance that SOMETHING survives)