You have to be careful with your analysis. In particular when you're talking about large deficits, you should not confuse private actors and government. In the

You have to be careful with your analysis. In particular when you're talking about large deficits, you should not confuse private actors and government. In the run-up to the crisis, the economy was largely fuelled by private debt. Think excessive credit card debts and, more importantly, insanely lax mortgage requirements. What we have been witnessing is a shift of this debt away from the private sector (which cannot sustain an unlimited amount of debt) to the government sector (which, at least in the case of a sovereign government like the US, can sustain an unlimited amount of debt because it's the entity running the system). The distinction between private and government debt is crucial, because government debt equals private assets.