debt, public
Introduction
The U.S. national debt originated with the American Revolution and as of 2020 amounted to more than $20 trillion. President Ronald Reagan made the debt a campaign issue in his successful presidential run (1980), but the national debt nearly tripled during his presidency. By the late 1990s, however, a federal budget surplus allowed President Bill Clinton to start paying down the debt—the first time this action had been taken since 1972. In 1998, Clinton presented the first balanced federal budget (with no annual deficit) since 1969. By 2002, however, the large tax cuts enacted under President G. W. Bush, combined with the effects of an economic slowdown and increased expenditures on national security following the Sept. 11, 2001, attacks on the United States and the U.S. invasion of Iraq, led to new deficits and an increase in the national debt. In the financial crisis that began in 2007 and the subsequent recession, the U.S. government's efforts under Presidents Bush and Barack Obama to stabilize the financial system and revive the economy led to record budget deficits, and significant increases in the public debt, especially through 2012. Under the Trump administration, government spending to compensate for the economic effects of combating COVID-19 increased the deficit and public debt dramatically, and as the economy contracted led the public debt to approach 100% of GDP for the first time since the 1940s.
Sections in this article:
- Introduction
- Payment of the Public Debt
- Forms of Government Indebtedness
- Reasons for Government Indebtedness
- Bibliography
The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2024, Columbia University Press. All rights reserved.
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