THE DAILY SIGNAL:
At the end of 2009, the total federal debt was $12.3 trillion—a staggering amount of money.
Now, it stands at an astonishing $23.1 trillion. That’s roughly $180,500 of debt for every U.S. household.
It is important for Americans to understand how we got here, and what lawmakers can do to bring back fiscal sanity.
Poor Handling of the Financial Crisis
The federal government entered the 2010s with sky-high annual deficits. This had two primary causes.
First, the Great Recession reduced incomes and profits, which meant a sharp decrease in tax revenue. A slow economic recovery kept tax revenue relatively low for several years.
Second, legislators used the recession as an excuse to massively increase the amount of federal spending. The 2009 stimulus package in particular led to record-setting spending levels.
President Barack Obama largely sold this additional spending as a way to jump-start the economy. But the structure of the stimulus package told another story. The politically motivated design of the package meant that it was ineffective at growing the economy.
What it did do effectively was grow the national debt. Low tax revenue and high spending combined to generate federal deficits of over $1 trillion per year starting in 2009.