question plzz answer?
why is the United States in debt?
- 1 decade agoFavorite Answer
That is an excellent question. The easy answer, as so many people have stated, is that America is spending more than it is making. But the issue is obviously much more complicated and convoluted than that. The United States has both internal and external debt. Internal in the sense that it owes its own people money (pensions, social security, etc), and external in that it has borrowed money from other nations and supranational organizations. *There is also the issue of individual American's debt. The average American has thousands of dollars of personal debt outside of their portion of national debt.*
How and when and for what the money was borrowed is the hard part. After WWI America was perhaps more fiscally well off than at any other point. Americans were irresponsible, however, with the new wonder of the stock market, and we soon plunged the world into the great depression we were already being dragged into by calling in debts owed from WWI. During the depression, citizens became very disgruntled and unhappy with the government. They insisted the government do something to provide jobs, food, and supplies. This was a major change in mindset. Prior to this point, American's did not want the government meddling in their finances. The government proved incapable of meeting these demands, however.
WWII untimately bailed us out of the great depression. A portion of our work force (militarily) was removed, creating jobs and there was a national feeling that promoted productivity. Women stepped up and filled remaining employment needs for running 'the war machine' and we were well on our way to recovery. When WWII ended and the soldiers returned home, the women returned to their homes for the most part. In addition, Europe and other war ravaged areas relied on the primarily unscorched U.S. to provide them with much needed goods. Prosperity continued throughout the 1950s.
It was during the war that Keynsian econimics were born. The idea behind them was that there is tolerance for fairly high levels of public debt to pay for public investment in lean times, which can be paid back with tax revenues that rise in the boom times. The theory had worked well for WWII, but has not done too much for us since. The Cold war was long and expensive. We competed in the space race and against the spread of 'communism;' which drew us into wars in Asia (Vietnam and Korea). These engagements were not as far reaching, popular, or as economically gainful for the US. The need for resources, however, remained. We begain borrowing for oil and many other costly resources. The borrowing was consistant and has not stopped. The idea that the tax payers would pay off the debt during "boom times" never happened.
A prime example is the economic boom in the 1990s. Clinton's administration was successful in reducing the national debt to some extent, but doing so at that point was not even very popular however necessary. With that kind of boom, one would have expected the entirety of the debt to be paid off, but since American's weren't faced with hardships, they again did not want the government meddling in their finances. Thus the grumbled about taxes and found flaws in the central goverment to gripe about.
The current spending for the military action in the middle east is simply the icing on a cake of half a century of borrowing with out honoring our promise of repayment. There is an interesting cultural and philosophical angle too. Have the people of America lost their work initiative and become lazy? Are we raising our children to become productive members of society or do we give them all lifes comforts too easily? If that is the case, shouldn't we heed the advice about not lying on our (60 year old) laurels? Can we continue to accrue debt, remain overextended, allow our youth to be inactive and not be productive much longer?
History would indicate that we are ready for a fall, and a mighty one at that.
Sorry about the brevity. The issue, as I said, is very complicated and I tried to summarize it as clearly as I could. At the same time, I may have rambled since its an issue I feel strongly about.Source(s): American history, economics, politics, and philosophy classes over the years.
- 1 decade ago
The only reason that I can think of that would be putting the U.S.A. in debt would be the war they are fighting... Each day that goes by costs millions of dollars that Bush spends without any care!!! Just wait until the next election and watch how quickly the troops are pulled out and the U.S. debt starts to drop. that's is Bush is not reelected...
- 1 decade ago
Because Bush is an idiot spending too much cash in Iraq and big buisness's
- Anonymous1 decade ago
More cash going out than they've got coming in..
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- 1 decade ago
ask ur history teacher
- 1 decade ago
because we're spending money we don't have