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Preheat oven to 325 degrees.
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Line large baking sheet with aluminum foil. Set aside. Put the ground beef and ground veal in a large bowl. Add 1 tsp. salt, 1/2 tsp. pepper, bread crumbs, 1/4 cup water and garlic powder. Mix with your hands. Make meatballs and place on baking sheet. Bake for 20 minutes. Remove and put meatballs on paper towels to drain off any liquid.
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In a large stock pot, heat oil on medium heat. Add onion and garlic and saute until slightly translucent. Add the tomatoes, tomato sauce, tomato paste, 6 ounces of water, salt, pepper and sugar. Stir for a few minutes till heated.
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Add the meatballs to the sauce. Cook for about 1/2 hour on low-medium heat. Add basil. Cook about another 1/2 hour. Remove from heat.
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Prepare spaghetti of you choice and drain well. Using a large platter, put spaghetti on first, Drizzle a little olive oil, add the meatballs and some sauce. Serve remaining sauce in a gravy boat.