Let's say that some fiscal responsibility was a useful but incomplete part, and that success hinged on the overriding fact that so much wealth was created by the American people back then --the reasoning being that from '46 to '70 the total nominal amount of debt actually increased by a third, while the gdp doubled. What I remember of those days is that people didn't consider the federal budgets particularly "responsible", but they sure felt prosperous.
We know we need both, wealth and fiscal responsibility, and they have to be in the right mix. At times when we're forced to choose just one, we have to protect wealth creation first and put off fiscal responsibility for later. Recovering the lost ability to create wealth in the '30's involved a lot more suffering than the recovery from the overspending of a decade later.
I love your graph and sources; we're definitely getting somewhere. We got the total public debt and it's annual change. I went further and included the annual change of private net worth % gdp (data here).
If there's any connection between public debt and private wealth, then paying off the war debt didn't seem to hurt us nearly as much as the budget surplus of the late '90s. Then again, I'm not willing to say there is a connection anymore than you are.
Cheers, and don't forget to vote!
