Our Fiscal Situation Has Deteriorated Dramatically Since 2001

 From Committee for a Responsible Federal Budget, Jan. 5, 2025 - 

In 2001, the federal government ran a surplus and CBO projected that the national debt would be fully paid off by 2009. Instead, our fiscal situation has deteriorated, with debt held by the public growing from 32 percent of GDP at the end of FY 2001 to 98 percent of GDP at the end of 2023. We analyzed what caused this debt growth in our paper, "From Riches to Rags: Causes of Fiscal Deterioration Since 2001." We find that debt growth can be attributed to both tax cuts (37 percentage points of debt-to-GDP) and spending increases (33 percentage points of debt-to-GDP). Another one-third of growth is due to recession responses (28 percentage points of debt-to-GDP). Absent these tax cuts and spending increases, the debt would be fully paid off. Our paper also finds that most of the debt, 77 percent of GDP, was approved on a bipartisan basis.

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