This graph will probably be more useful in explaining the current debt.
The best way to think of our debt versus GDP is to use the analogy that we all face in life. Think of the GDP being your wages for the year, and the debt being your Visa Bill. Let's say you make $50,000 per year take home, at this point you would have $31,000 on your Visa bill. The real kicker is that of that $50,000 per year, you are spending roughly that or a little more and keep racking up the cash on your Visa.
During a recession like we are having, that's actually the economically intelligent thing to do. There are two ways to stimulate growth in our economy and that's where the two parties differ. The Republicans believe that by maintaining the current level of spending and cutting the tax revenue to encourage growth (i.e. more money to pay for health insurance). The Democrats believe that you increase spending, while maintaining the current level of taxation to encourage economic growth (i.e. cheaper health insurance). Both philosophies have been proven to work, the difference is that one increase the money in the consumers pockets, while the other decreases the amount of money the consumers must spend to get the same goods and services. Both of them unfortunately generate debt for the government as spending outpaces revenue.
The positive side of course is that over time the increased spending of the consumers generates more tax revenue and pulls us out of the recession. At that point, Ideally the revenue has increased to a point that it exceeds the spending. (Whether you cut taxes or increase spending the gap between the two generally stays the same regardless of which party is doing the economic recovery)
One serious problem we have had for a considerable amount of time is that we have been raiding the Social Security trust fund to pay for that increased spending. In effect it's like borrowing money from your own retirement to buy a boat, and then finding out that when you want to retire, you forgot to put the money back in your retirement fund. That's pretty much where we sit today with Social Security.
When we're finally out of the recession, the government is going to have to make some serious cutbacks somewhere, either in Social security expenditures (Raise the age you can retire, reduces benefits, counterfeit someone elses currency to pay for our debt with funny money), or elsewhere like in areas of Defense or social programs. Of course no politician wants to do this because telling the people you are reducing their benefits would be the equivalent of pissing away your political career. In 1999 we _almost_ ran a surplus without raiding Social security, but missed it by 100 million. But hey, what's 100 million dollars among friends right?
Unless someone starts doing some serious social security reforms, the program will be going tits up in around 2042, and then we won't have anything to borrow from to cover our overruns. Of course neither of the morons running for President this year are fiscally responsible, so I expect this will be a problem for another 4 years. Hopefully, whoever wins, McCain will decide to run in 2008 and straighten out the budget and perhaps institute some drastically needed reforms.
One major problem with social security is that it was never intended to be a long term retirement fund. At the time it was instituted, most people on average only lived to about 65 years of age. Ironically the age at which you could begin collecting benefits was 65 years of age. It was more of a, 'I can't believe you lived this fucking long, it's time to relax until you die, and since we're now an industrial society, you can't go relax with the kids on the farm so here's a few pennies to enjoy florida bingo'. Now of course, we have people living to be 90-100 years old with the average life expectancy average of 77 years. People are taking more out of the system, than they paid into the system. Not a bad deal if you're the retiree, but not such a great thing if you're one of the people who actually has to pay for it and will probably never see it.
Add onto that the Baby boomers who will soon be retiring and it's headed for a grand catastrophe because those SOB's will probably live to be 80-85 years old.