There is an old joke intended to put down economists: A former student returning to visit his old economics professor finds the professor in the classroom preparing a test for his current students. The former student is shocked. “These questions are exactly the same as the ones you asked us many years ago,” he says. “Yes,” replies the professor, “But I’ve changed the answers.”

There is an old joke intended to put down economists: A former student returning to visit his old economics professor finds the professor in the classroom preparing a test for his current students. The former student is shocked. “These questions are exactly the same as the ones you asked us many years ago,” he says. “Yes,” replies the professor, “But I’ve changed the answers.”
All this is to say that economics is not a “hard” science like chemistry, physics or climatology, leaving more latitude for differences of opinion. One interesting question which resurfaces repeatedly: How much federal debt is too much debt?
If you ask a financial advisor how much personal debt is too much, he will probably tell you it depends on two things - first, how big your income is, and second, what you spend the borrowed money on.  A $100,000 debt is obviously more dangerous for someone with a $20,000 income than for someone with a $200,000 income. And debt used to invest in a home is better than debt used to play the horses.
As with personal finance, the dollar amount of the national debt is less important than the ratio of that debt to the Gross Domestic Product (GDP) which can be thought of, roughly, as the country’s annual income. And debt invested in infrastructure is probably better than debt poured down the defense rat hole. (We already spend more than the next seven to ten countries combined, depending on who’s doing the calculating.)
Interestingly, except for one year, back when Andrew Jackson was president (1835), the U.S. has always had some debt. The figures given below are for the gross national debt, which is a combination of the public debt (bonds owned by individuals, companies or foreign countries) and the internal debt (money the government owes itself) such as the Social Security and Medicare trust fund.
The highest the ratio of gross debt to GDP ever got was at the end of World War II (1946) when it stood at 118.9 percent. From there the ratio decreased steadily until it hit a low of 31.7 percent during the Carter administration (1981).  
During Reagan’s term, Congress drastically cut taxes. Reagan claimed lower taxes would boost the economy enough to actually raise federal revenue (supply side economics). That didn’t happen, forcing Congress to raise taxes later in his term. Still the debt to GDP ratio increased from 32.5 percent at the beginning of Reagan’s term to 53.1 percent at the end.
George Bush #1, who had called supply side “voodoo economics,” was also forced to raise taxes to try to stem the flow of red ink.  This had terrible political repercussions for him. Remember, “Read my Lips?” Even with those tax increases, the ratio rose to 66.1% by the end of his term.
During the Clinton years, because of a strong economy, the ratio dropped slightly to 56.4  percent, But Congress, under George Bush #2, decided to give supply side another try with more tax cuts. The ratio increased to 84.2 percent by the end of his term.
During the Obama years, having inherited two unfunded wars and the biggest recession since the great depression, the ratio increased to 105.4 percent.  
With Republicans again embracing supply side economics, Congress has passed both an enormous tax cut and an equally enormous spending bill.  The Congressional Budget Office (CBO) predicts just the public part of the debt will rise from 78 percent to 96 percent by 2028.  Of course, if they remain in power, Republicans may be able to shave some off the internal part of the debt.  The house budget committee has plans for deep cuts to Social Security, Medicaid and Medicare.
How much debt is too much?  We may eventually find out.

Jim Rhoades writes a column for the Neosho Daily News.