Title: The National Debt Explained
Headings: The National Debt Explained
The National Debt Explained
Key Takeaways
National Debt vs. Budget Deficit
Forms of Government Borrowing
A Brief History of U.S. Debt
Understanding the National Debt
How Bad Is National Debt?
What the Government Spends Money On
Medicare/Medicaid and Other Healthcare Programs
Social Security Program and Disability Pensions
Defense Budget Expenses
Other Miscellaneous Expenses
What Makes the Debt Bigger?
The Overburdened Social Security System
Healthcare
Continued Tax Cuts
Wars in Iraq, Syria, Pakistan, and Afghanistan
Possible Consequences of the Growing National Debt
Increased Risk of Government Default
Forced Coupon Increase of Corporate Debt Offerings
Increased Costs to Borrow Money
Loss of Investment in Other Market Securities
Methods Used to Reduce Debt
Monetization
Interest Rate Manipulation
Spending Cuts
Raise Taxes
Bailout
Default
A Polarizing Topic
Article Sources

Content: That is the highest level since 1946. 9 ﻿ 10 ﻿ Since 1970, when the national debt stood at about 26.7% of GDP, debt has gone through a few different periods, staying fairly steady through the 1970s, rising drastically through the 1980s and early 1990s under the Reagan and Bush Presidencies. It peaked in Q1 1994 at 48.3% of GDP, before falling again under the Clinton administration to a low of 30.9% in Q2 2001. It started climbing under George W. Bush again, slowly at first, and then sharply. 9 ﻿
As the financial crisis hit with the worst recession since the Great Depression, government revenues plummeted and stimulus spending surged to stabilize the economy from total ruin. This economic catastrophe, combined with an enormous reduction in revenue from the Bush tax cuts and the continued expenses of the Afghanistan and Iraq Wars, caused the debt to balloon. Under the two terms of the Obama administration, federal debt held by the public rose from 43.8% of GDP in Q4 2008 to 75.9% in Q4 2016, a 73.3% increase. 9 ﻿
Under former president Trump, the national debt rose by 4% in his first three years in office. 9 ﻿ While Trump further slashed federal revenue with his Tax Cuts and Jobs Act, the national debt didn't expand sharply as the economy had largely recovered from the 2008 financial crisis. However, in 2020, when the COVID-19 pandemic hit and spread unchecked, the U.S. economy was sent into recession.