Actually just the opposite is true:



The federal government has balanced the budget, eliminated deficits for more than three years, and paid down the debt more than 10% in just six periods since 1776, bringing in enough revenue to cover all of its spending during 1817-21, 1823-36, 1852-57, 1867-73, 1880-93, and 1920-30. The debt was paid down 29%. 100%, 59%, 27%, 57%, and 38% respectively. A depression began in 1819, 1837, 1857, 1873, 1893 and 1929.



And to answer your question these are ALL of the depressions in US history. So all financial meltdowns with the possible exception of 2008) were preceded by periods in which there was NOT ENOUGH federal debt, periods in which money flowed OUT pf the private sector INTO the federal sector.



Actually 2008 fits in also. The main cause of the financial crisis of 2008 was the same as the cause of our 6 previous ones. There was a protracted period before the crisis when money flowed OUT of the private sector. Except for a brief period in 2003, the current account deficit, which took money out, was larger than the federal deficit, which put money in.



This had two effects. There was the obvious one that people, businesses and state & local governments had to turn to banks to get money to function. BUT the other effect was that banks had less reserves to make loans. By 2007 the big banks had 27 or 28 times in outstanding loans as they had in reserves. As in the previous 6 crisis, the banking system cannot function like that. We would have had another depression like 1929 but this time we had a FED willing and able to pour TRILLIONS into the banking system to save it.



Finally to answer your other question, the ONLY limit to the printing of money is inflation.