As of February 2001, the US national debt was over 5.8 trillion dollars and the national debt has continued to increase an average of $202 million per day since February 26, 1999! As the growing debt approaches fifty percent of GDP, it is one of the largest economic problems facing the United States today. The future of the US economy looks dim unless the debt's growth is curbed. During the 1980's the budget deficit soared due to increased spending and decreased taxes under the Reagan administration. Since the beginning of the 1990's the deficit has decreased slightly but it is still over $100 billion (Building Blocks 21). Clearly something must be done to decrease the budget deficit and slow the growing debt. There is a difference between the national debt and the budget deficit. The national debt is the total amount of money owed by the government; the federal budget deficit is the yearly amount by which spending exceeds revenue.
Add up all the deficits (and those few budget surpluses we've had) for the past 200+ years and you'll get the current National Debt. Some in the government are even considering a Balanced-Budget Amendment, but what would be best for the US economy?
Historically, the United States has consistently had a debt, which has been constantly growing. However, the debt is best judged in comparison to the Gross Domestic Product (GDP) which is a measure of the size of the national economy. Much of the debt is owned by the Federal Reserve, which is part of the US government, so a more accurate measure of the debt is the "debt held by the public." After enormous defense spending during WWII, the debt was 110% of GDP, but it decreased steadily to 25% of GDP by 1975. Today the debt is...