This is largely down to GOP-administration tax cuts for the ultra-wealthy and to a lesser extent the Iraq War. During the Clinton administration the US was briefly even running budget surpluses.
Source for this? Based on a cursory search the numbers don't seem to match up.
* The current national debt is $24.19T or $30.85T, depending on how you count[1]
* The CBO estimated the bush tax cuts to have added $1.5T to the debt between 2002-2011[2]
* The CBO estimated that if the bush cuts were fully extended at all income levels, it would add $3.0T to the debt over 2010 to 2019[2]. I skimmed the article and it looks like that obama only partially extended it, so $3.0T is more of an upper bound
* The CBO estimated that the trump tax cuts[3] would add $2.289T (or $1.891 trillion "after taking into account macroeconomic feedback effects") over 10 years. Again, this is also an upper bound because the tax cuts have only been effect for 5 years but the figure is for over 10 years.
If you add all the estimates you get an upper bound of around $6.8T, which is a good chunk of the the current debt but I wouldn't characterize the debt as being "largely" due to the tax cuts. Not to mention, the figures above are overestimates due to the reasons I previously mentioned.
[1] https://en.wikipedia.org/wiki/National_debt_of_the_United_St...
[2] https://en.wikipedia.org/wiki/Bush_tax_cuts
[3] https://en.wikipedia.org/wiki/Tax_Cuts_and_Jobs_Act_of_2017
It’s hard to find any kind of careful analysis about the counterfactual question of cumulative differences in revenue and taxes if Carter-era tax policy had remained in place for the past 40 years. It requires making strong, almost certainly unjustified, assumptions about the rest of federal policy and the trajectory of the economy. But we’re talking about cumulative numbers on the order of 10 trillion dollars, to within say a factor of two.
You also have to decide what to lump in with the same set of policy changes (e.g. successive reductions in IRS enforcement capability, cumulatively leaving $trillions more on the table, changes to labor law and the minimum wage, ...). And there are certainly other large-scale sources of deficits.
Some of the Reagan tax cuts were offset by substantial increases in payroll taxes, shifting the tax burden from the wealthiest onto the working class, and depressing after-tax wages.
It will take either an end to global trade or a massive unilateral revision by the United States to fix it.
If the US deficit stopped increasing it would result in US consumers being forced to eat the deficit instead.
Edit:. This isn't my idea. I'm parroting a guy by the name "Michael pettis".
look him up and don't credit this to me. I'm just a fool who believes this guy who posts on the internet.
If I trade X dollars for Y amount of goods, I by necessity must owe x dollars.
That "IOU" can be transformed in many different ways. But you can't erase it (without consequences that would end the flow of goods). If we have a trade deficit we have X dollars of IOU now in our economy that most go somewhere.
Where does it go?
Into debt, and eventually erased by either paying, inflating away, or printing money.
China has massive foreign reserves holdings, and it's been trying to hide that recently with some clever numerical juggling by having state banks hold it all (someone at the top said they have to reduce holdings after Russia got screwed).
I'm not 100 on how you can have internal debt and external surplus, sorry. You'll have to talk to someone smarter for that.
In the simplest case, suppose the government of an export-heavy country such as Germany, Japan or China simply stopped collecting taxes for a year. It would be self-evident that their government would run a large budgetary deficit no matter how large their export surplus for that year was.
You can't pull single statistics to tell the whole story and you're probably going to be wrong if you try it.
For example, a surplus can appear in the form of the average citizen holding US bonds. Large foreign reserves, stuff like that.
The US, for example, doesn't have to have it's deficit show in government debt. It could be held by citizens or the states or so on.
It just so happens that in this case, it does, because the government is taking on a burden the citizens would reject and averting (temporarily) an economic disaster.
China has a massive trade surplus. It has not had a trade deficit in years, and that must show in its pocketbook.
I really can. If your premise is that the US has to run a government deficit because China runs a government surplus then the fact that the Chinese government doesn't run a surplus really sinks the whole line of thought.
Again: government spending is not the same thing as the balance of trade. Japan runs a huge current account surplus, but has the highest ratio of government debt to GDP in the world.
It is a problem not because it's government debt, it's a problem because of the lost jobs. It's a problem because of our dependence on China for goods. It's a problem because it's inherently unsustainable debt no matter what form it takes.
Most people invest it, loaning it to others. But how do you invest money? By someone else taking debt.
Most nations around the world are locked into trying to make more than they consume. So if you want to buy German debt you'll find you can't - every dollar you buy from them they'll immidiately go looking to buy someone else's debt in a game of musical chairs.
If there were no net debtor, eventually the production of 100 dollars and purchase of 25 would have to stop. You'll make more than you need and your economy will be halted by deflation, layoffs, and so on.
Enter America and the global economy. Now you can buy USD with those 75 dollars and keep on producing. Because your state is locking you into a trade surplus, the more free economy of the USA is by necessity locked into a deficit. Our companies who try to export immidiately fail to the foreign companies with cheaper labor and state subsidy. The companies trying to export go out of business. The ones using import benefit greatly, and the economy changes.
If we locked out this cycle with tariffs and import restrictions it forces China to face the music. Either their 100 productivity must result in 100 spend, or they will face economic and social issues bad enough to turn that 100 dollars of productive work into 25.
If China sells more stuff to the US than the US buys from China, then China ends up being a net holder of US dollars, which end up in some US denominated investment asset. This is the balance of payments. Since China is a net exporter to the US, it is also therefore a net investor in the US.
The question of what the investment ends up being in is affected to some extent by the availability of US debt, but it could equally well end up being in equity or real-estate or whatever.
The fact the balance is forced to be off as a result of Chinese policy and our failure to counter it in the name of free trade is the problem.
It forces the US national debt up because if it wasn't the national debt it would be in far more harmful places, so our politicians have no choice. Increase debt or lose your job next election.
Budget Deficit By Year (billions)
2002 - $158 (R)
2003 - $378 (R)
2004 - $413 (R)
2005 - $318 (R)
2006 - $248 (R)
2007 - $161 (R)
2008 - $459 (R)
2009 - $1,413 (R)
2010 - $1,294 (D)
2011 - $1,300 (D)
2012 - $1,077 (D)
2013 - $680 (D)
2014 - $485 (D)
2015 - $442 (D)
2016 - $585 (D)
2017 - $665 (D)
2018 - $779 (R)
2019 - $984 (R)
2020 - $3,132 (R)
2021 - $2,772 (R)
2022 - $1,375 (D)
Congress, not the president, controls the government's budget.
It's snark, but I think it pretty well encapsulates the state of typical discourse; A consistent way to look at the numbers over the long-haul never really enters the public picture.
The government does not have a right to my money. They spend all the money we give them, then demand more so they can spend more money.
The government spends too much money. They should take less of my money. Taking less of my money is not the problem, spending too much of the money they already took from me is.
It will now take less money from everyone richer than you. However, it is also going to now take more from you, and everyone poorer than you. No fear - this is the exact same as taking less from you, because you will get richer, just as soon as all the people richer than you get tired of having money.
How about solving that before cutting taxes?