What is new is: this will trigger the credit bubble to implode which is weighed down by a record huge deficit. Then your going to see the el dumpo of all el dumpos and will make Black Monday look like a day at Disneyland.
So elect spendthrift taxamania Kerry and watch the economy fall into the abyss... 
Judging from a quality of life standpoint, I'd say your chart indicates that higher debt levels are better. In the mid to late thirties the debt ratio went down dramitically as did the quality of life. In the late sixties and most of the seventies, the debt ratio was flat. Were you alive during that time? Yuck.