Saturday 16th of January 2021

Record Debt for the Nation in 2009

You’ve probably heard all about the nation’s slumping economy, poor home market, and possible student loan crisis - now you can add the federal deficit to the list of woes. President Bush and the White House recently predicted a record $482 billion deficit in the 2009 budget year. The deficit represents about 3.3% of the gross domestic product, used to measure the nation’s total economy. Many people wonder how the United States’ debt ever got to this point, a question to which there’s no easy answer.

Effects of the Tax Stimulus

One of the main culprits in the $482 billion debt is the economic stimulus package the government provided through tax rebates. Cutting the majority of tax payers a check for $600, the stimulus package was designed to quickly breathe new life into the struggling economy. Although government officials immediately recognized the negative effect such a stimulus would have on the nation’s debt, it was believed that a shot in the economy’s arm was more important than solving the budget at the time. Had the stimulus not been approved, the federal deficit would have been somewhat more reasonable at about $272 billion or 2.2% of the nation’s economy. While the jury may still be out about regarding the effect of the stimulus package on the economy, most people have already decided who to blame for the country’s record debt.

Bush to Blame?

So who is typically being blamed for the nation’s enormous deficit? Ask most politicians and officials and it’s none other than President George W. Bush. After taking over office in 2001 and inheriting a budget surplus of $128 billion, the Bush administration has posted a budget deficit every single year since. Aside from tax cuts and a poor economy, the highly criticized and still ongoing wars in Iraq and Afghanistan have cost the administration dearly. Some politicians have been very vocal about the current administration’s poor financial decisions, calling Bush “the most fiscally irresponsible president in our nation’s history.” Government officials claim many of the budget problems come from inadequate intelligence, defense, and homeland security resources left from the Clinton administration. Clearly, through the adoption of new agencies and bills like the Patriot Act, President Bush has greatly invested in shoring up these resources. As Bush begins to make his way out of office, you can expect the federal budget to be a hot debate among presidential candidates Republican Senator John McCain and Democratic Senator Barack Obama.