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The 2000s in America

National debt

by Michael P. Auerbach

Definition: Total amount a national government owes

The national debt grew dramatically during the 2000s as two fiscal recessions and relatively slow economic growth fostered larger deficits. The United States’ entry into military conflicts in Afghanistan and Iraq further increased the nation’s debt. Congress took a number of steps throughout the decade to cut spending, raise revenues, and avoid reaching the debt ceiling.

Since the establishment of the United States, the federal government has been able to operate with budget deficits by borrowing money to finance them. However, the national debt—the total amount the government owes—cannot be allowed to reach the same level as the gross domestic product (GDP), or else it could surpass the country’s level of economic growth. To prevent this, the government has in place a statutory “debt ceiling,” which limits the size of the debt and prevents this issue from becoming reality. The placement of this ceiling can be adjusted in response to increased budgetary needs.

During the 2000s, the possibility of reaching this ceiling became a significant concern because tax revenues, the government’s primary source of income, dwindled while budgetary needs increased. The US economy experienced a recession early in the decade, and following the terrorist attacks of September 11, 2001, military and homeland security spending increased dramatically. The United States began an extremely expensive military campaign in Afghanistan, and in 2003, American troops were deployed to Iraq as well, putting further strains on the military budget. High unemployment and low production in the United States resulted in the collection of fewer tax revenues to pay for those conflicts, particularly as a second recession began in 2007. As a result of these factors, the national debt increased by more than 6 trillion dollars over the course of the decade.

In response to the country’s increasing budgetary needs, Congress voted to raise the debt ceiling eight times between 2000 and 2009, ending the decade with a debt limit of more than 12 trillion dollars. Decreasing spending was also a major goal, and Congress launched a series of budget reforms that reduced targeted spending and modified the budget items that were typically guaranteed, such as those going to certain defense endeavors.

The Durst Organization’s National Debt Clock in New York City

AUGHTS_NationalDebt.jpg

(Courtesy Wally Gobetz)

Impact

Despite efforts to reduce the national debt, the United States owed a total of 11.9 trillion dollars by the end of the decade. An issue of significant concern among those in government as well as the public, the national debt would become a key talking point during both the 2010 midterm elections and the 2012 presidential election.

Further Reading

1 

Christensen, Jane R. The National Debt: A Primer. Hauppauge: Nova, 2004. Print.

2 

Labonte, Marc. The Magnitude of Changes That Would Be Required to Balance the FY2006 Budget. Washington: Congressional Information Service, 2005. Print.

Citation Types

Type
Format
MLA 9th
Auerbach, Michael P. "National Debt." The 2000s in America, edited by Craig Belanger, Salem Press, 2013. Salem Online, online.salempress.com/articleDetails.do?articleName=2000_0261.
APA 7th
Auerbach, M. P. (2013). National debt. In C. Belanger (Ed.), The 2000s in America. Salem Press.
CMOS 17th
Auerbach, Michael P. "National Debt." Edited by Craig Belanger. The 2000s in America. Hackensack: Salem Press, 2013. Accessed September 18, 2025. online.salempress.com.