In January, the US reached its $31 trillion debt limit, a borrowing cap set by Congress, setting up a political battle between Democrats and Republicans over government spending – with each side blaming the other for running up the federal debt.
But both parties have played a role in adding to the debt, and it’s difficult to cast blame fairly.
While presidents sign bills into law, it’s Congress – which may or may not be controlled by the president’s party – that passes spending legislation and tax reforms. Plus, the president and Congress do not have full control over the economy, which can sometimes have a bigger impact on the debt than laws.
Further still, decisions made by past presidents and lawmakers continue to have an impact on the amount of debt acquired today.
“Most of the problem has not been created by any recent officeholder,” said Charles Blahous, senior research strategist at the Mercatus Center at George Mason University and author of the paper, “Why We Have Federal Deficits.” The 2021 report attempts three different ways to assign blame for the federal government’s long-term debt problem.
More recent legislation, like pandemic-related spending and expanding access to affordable health care, has added to the debt. But the impact of those laws on the long-term structural fiscal imbalance are dwarfed by the creation of Medicare and Medicaid and increases to Social Security made between 1965 and 1972.
“Despite all the political rhetoric expended today to cast blame for skyrocketing federal deficits … the largest drivers of the structural federal fiscal imbalance were enacted roughly a half-century ago,” Blahous wrote in his report.
To put the size of the federal debt in some context, it’s currently at about the same size as 97% of the country’s gross domestic product, or GDP,…
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