WASHINGTON — Two centuries after America's birth, the national debt was a bit under $1 trillion when Ronald Reagan took office in 1981. Just three decades later, it has soared above $14 trillion, and accusations of blame are flying. Both Republicans and Democrats played major roles in driving the figure sky high.
Leaders of both parties acknowledge that failing to raise the limit could force the government to begin defaulting on some of its obligations — for instance making interest payments on Treasury bills and bonds — with severe adverse consequences, including possibly pushing the economy back into recession
Republicans like to blame Obama and congressional Democrats, citing heavy spending that they claim has done little to end the recession or create jobs. Democrats argue that the stage for fiscal ruin was set by Republican President George W. Bush, with large tax cuts that favored the wealthy, two wars and a vastly underfunded prescription drug program for the elderly. They accuse Bush of squandering a budget surplus handed him by President Bill Clinton.
In fact, spending far outpaced revenues in both the Bush and Obama years. And the main culprit in addition to war spending was the devastating 2007-2009 recession, which not only prompted hundreds of billions of dollars in downturn-fighting spending by both the Bush and Obama administrations, but also resulted in a sharp dip in tax revenues due to sagging individual and corporate incomes.
If there are no changes in government policies, the debt will soar to $18.76 trillion by 2014 and $20.8 trillion by 2016, according to administration projections.
Wow, that is pretty sobering statement.