How did the U.S. run up so much debt?
The crucial turning point came back in 2001. At the time, Uncle Sam was actually running surpluses, and "the outlook was so rosy" that forecasters were predicting the U.S. could pay back every dime it had ever borrowed. That's when President George W. Bush made a pivotal decision: Rather than use surpluses to pay down the national debt or fix Social Security, Bush elected to push through two massive tax cuts, on the grounds that "the surplus is the people's money."
Bush and Congress then financed two wars at the cost of $1.3 trillion, spent $272 billion on a Medicare prescription benefit, and expanded other defense and domestic spending. When the economy cratered in 2008, it cut deeply into revenues already diminished by Bush's tax cuts. All told, Congressional Budget Office statistics show, Bush's policies account for more than $7 trillion of the debt the U.S. has accumulated over the past decade. President Obama's policies, including his $719 billion stimulus program, have added $1.7 trillion to that debt.
Today, future budget forecasts "are unrelievedly gloomy, showing huge deficits essentially forever." And, it all began with a choice, 10 years ago, to cut taxes to their lowest level in 60 years, withno cuts in spending.
[Lifted from Lori Montgomery, who covers U.S. economic policy and the federal budget for the WashPost, focusing on efforts to tame the national debt. She has written extensively about every major piece of legislation to pass Congress since 2008, including the TARP bank bailout, the Obama stimulus package and the Democratic overhaul of the health care system. Hattip: K&BM]