RELEASE: New Video Illustrates What Caused America’s Debt
Contact: Katie Peters
Washington, D.C. — In a new explanatory video out today, Michael Linden, Director of Tax and Budget Policy at the Center for American Progress, offers a remarkably clear look at the precise sources of the $6 trillion in government debt accumulated over the last decade.
The federal budget deficit consistently polls as one of the most important problems facing this country, according to Gallup. It’s no surprise, then, that politicians love to point fingers about what has caused our publicly-held debt to balloon.
But just because politicians disagree—or are confused—about the source of our national debt, doesn’t mean we should relegate this important conversation to spin rooms and opinion columns. There are hard truths about why the government has had to borrow so much money in recent years. And when well explained, these truths are not hard to understand.
In the video released today, Linden set out to understand how a projected $6 trillion budget surplus predicted by the nonpartisan Congressional Budget Office in 2001 turned instead into $6 trillion in additional debt over the next 10 years. Here’s what he found, and what the video shows:
- A poor economy wiped out more than half of the projected surplus. That is, the economy performed worse than the CBO predicted, reducing projected surpluses by more than half.
- The Bush-era tax cuts wiped out the rest of the surplus. Tax cuts signed by President George W. Bush between 2001 and 2008 reduced tax revenues by about $2.3 trillion, all but wiping out the rest of the projected surplus.
- A surge in spending under President George W. Bush is responsible for a huge chunk of debt accumulated in the last decade. President Bush massively increased spending—without increasing revenues or offsetting costs elsewhere—to pay for wars in Iraq and Afghanistan, a new Department of Homeland Security, Medicare Part D, and other items. That spending alone accounts for 40 percent of the difference between the CBO’s projected surplus and our actual deficit.
- Obama policies are responsible for just 14 percent of the difference between projected surplus and actual deficit. When President Barack Obama took office, he inherited $4.4 trillion in debt that had been accumulated since 2001. His stimulus bill, along with a variety of tax cuts and spending increases, account for the rest of the debt created in the last decade.
“We do face a challenge in reigning in our national debt, but the first step to fixing any problem is understanding how we got in the mess in the first place,” said Michael Linden.
Watch the video: Where Did the Debt Come From?
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