WASHINGTON -- The federal government learned over the last half-century that it could run up a much larger debt than experts had previously considered prudent or even possible.
Now, as Republicans push a tax plan that would propel the federal debt to new heights, experts are debating the lessons of that history. Some see evidence that the downside of deficits is greatly overstated; others say the country just hasn't reached the precipice.
Every dollar of federal borrowing clearly imposes real economic costs, starting with the basic obligation to make regular interest payments, including to foreign investors.
But the extent of additional costs is an unresolved question. If deficits are relatively benign, it would strengthen the case for near-term borrowing to increase growth.
Federal borrowing has increased sharply. From the mid-1950s until the global financial crisis in 2008, the debt never exceeded half of the nation's annual economic output. As of June, it stood at around 75 percent of that output. And even without new tax cuts or spending increases, the Congressional Budget Office projects that the debt will reach 106 percent of output over the next two decades, setting a record as an aging population strains federal retirement and health care programs.
The amount owed to investors is $14.4 trillion. That's already a record, but economists prefer to measure the debt in relation to the economy. The United States can afford a larger debt as the economy grows, just as millionaires can afford larger mortgages.
As the federal debt rose in the 1980s, and again in the early 2000s, so did the chorus of dire warnings: Inflation and interest rates would rise, economic growth would falter -- and, at some point, the markets might simply refuse to finance the federal government over concerns it would be unable to pay its bills.
This time around, even those who regard the debt as a real and present danger have become more cautious about the presentation of those arguments. They say policy makers simply can't know when markets might begin to demand higher rates.
''We don't have a measure of how much fiscal space we have, but a good political metric is to see how far we are from a record-high level of debt,'' said Marc Goldwein of the Committee for a Responsible Federal Budget, a nonpartisan group whose name describes its views.
He noted that the debt was on a pace to exceed the high point reached after World War II. ''I don't want to be in the business of testing how far we can go,'' he said.
The problem confronting those who want the government to reduce annual deficits is that the short-term consequences of profligacy have proved to be very modest, while the political benefits are substantial.
''It doesn't take a political scientist to understand that taking stuff away is a lot less popular than giving stuff out,'' Mr. Goldwein said.
Low interest rates have greatly reduced the government's borrowing costs. Measured as a share of the national economy, the federal debt is about three times as large as in the 1960s, but by the same measure, the interest payments are about the same.
Interest payments are still projected to total $6 trillion over the next decade. And one thing that has changed: 40 percent of the debt is now held by foreign investors.
The impact of federal borrowing on the rest of the economy is harder to assess.
Economists warned for decades that deficits caused inflation and reduced the amount of money available to the private sector, ultimately reducing growth and prosperity.
The years under President Ronald Reagan suggested that those theories needed some work. As federal deficits ballooned, inflation declined -- and all the while the economy grew.
''Reagan proved that deficits don't matter,'' Vice President Dick Cheney said in 2002, as the George W. Bush administration pursued a similar fiscal policy with roughly the same results.
The International Monetary Fund in 2003 published a study of 107 countries over four decades that found little connection between deficits and inflation in developed nations.
The economist Robert Mundell had predicted all of this in the early 1970s, offering an alternative to the standard theory that came to be known as supply-side economics.
He argued that the government should cut taxes to stimulate the economy, then raise interest rates to attract foreign investment, offsetting the increased federal borrowing.
''Suppose it does mean a budget deficit in the United States,'' he declared at the 1971 conference where he first presented the proposal. ''Who cares?''
When he was asked in the 1970s, Mr. Mundell predicted the money would come from the Saudis. In the 1980s, it came from the Japanese. In the 2000s, it came from the Chinese. The one constant has been a sufficient supply of money.
Other economists still see evidence that government borrowing weighs on the economy by reducing the money available for investment. This ''crowding out'' reduces the progress of productivity, which in turn suppresses the growth of incomes -- a fairly straight line from more federal debt to less money in the average American wallet.
The Congressional Budget Office estimated in 2014 that each dollar of debt reduces private-sector investment by somewhere between 15 and 50 cents, after accounting for the role of higher rates in encouraging domestic and foreign investment.
As the fear of debt has faded, both parties in recent years have embraced proposals to stimulate the economy at the cost of larger short-term deficits. Democrats have backed increased investment in infrastructure, education and research. Republicans argue that the government should simply leave more money in private hands.
Douglas Elmendorf, who led the Congressional Budget Office from 2009 to 2015, repeatedly predicted then that increased federal borrowing would pinch the economy. He said the failure of those predictions suggested there was room to borrow.
''The economy has recovered and interest rates have not risen, and that has caused a great deal of reflection and analysis,'' said Mr. Elmendorf, who is now the dean of the Kennedy School of Government at Harvard. ''The widespread conclusion is that interest rates are likely to stay below historical norms for an extended period.''
Mr. Elmendorf said the government in the long term still faced a difficult choice of some combination of raising taxes and reducing entitlements. It would be easiest to start soon so those changes can be made gradually. He noted that changes to the Social Security program passed in 1983 are still taking effect 34 years later.
In the short term, he said, the government should focus less on increasing overall economic growth than on improving the prospects of lower-income households.
Daniel Shaviro, a law professor at New York University, wrote a book called ''Do Deficits Matter?'' in the mid-1990s, back when most people thought the answer was yes. Today, he said, he worries that people are becoming too confident the answer is no.
He said the larger risks were real. If the debt continues to rise, ''there's a pretty good chance that something bad is going to happen at some point,'' Mr. Shaviro said. ''And you'd rather turn the wheel slowly and gradually rather than stopping abruptly.''
Follow Binyamin Appelbaum on Twitter @bcappelbaum.
PHOTO: Every dollar of federal borrowing imposes real economic costs, but to what extent remains unclear. (PHOTOGRAPH BY PETE MAROVICH FOR THE NEW YORK TIMES) (B4)