Things are bad and the fundamentals of the economy are poor. But this is in large part because for the last 30 years or so far too much emphasis has been placed in the financial services sector (and firms like Tulett Prebon) rather than in the sectors that can actually create real growth and wealth like manufacturing.
However the problem with debt has been much worse in the past.
The current discourse about national debt in the media and in politics is incredibly dumbed down. Alot people seem to assume that they understand economics because at a personal level they spend and earn money, have bank accounts, have mortgage debt etc but this understanding of personal finance is not relevant to trying to understand macroeconomics and long term economic trends and cycles. Trying to pin the blame for global economic meltdown on the Chancellor of a middle sized European economy is quite frankly, insane.