February 10, 2012
The
issue of national debt in the United States is that it has become too pervasive
and unsustainable. A large debt can have major ramifications, such as
constraining long-term economic growth, constraining government spending and
flexibility, increasing interest rates, etc. Another major problem is that
there is major disagreement about how the debt should be reduced. There are a
variety of different economic policies and options that this paper will outline
that has been used throughout history to reduce the debt. This paper will argue
that although the US has been in debt for the majority of its existence, the
issue of debt reduction has only become most salient after the 2008 global
financial crisis. The first part of the paper will explain the history of
national debt and the different policy responses that have occurred. However, the
second part looks at the period after Ronald Reagan’s administration to analyze
how the issue did not become salient until 2008 election.