Why We Are in Debt

May 16, 2011, 12:01 a.m. EDT
Why are we in debt? Tax cuts, recessions, wars
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Share | Recommend (13) PrintEmail Alert By Rex Nutting, MarketWatch

WASHINGTON (MarketWatch) — The federal government’s finances would be in great shape today if only we’d managed to stay out of a couple of wars and a couple of recessions, and if we hadn’t foolishly cut tax rates.

The story Republicans like to tell about the deficits — that it’s all due to a “spending binge” under President Barack Obama — doesn’t hold up if you do the math.

In reality, most of the debt racked up in the past 10 years and most of the debt we’ll rack up in the next 10 years is due to two recessions, two wars and some bad decisions made before Obama ever took office.