The United States federal government is almost $40 trillion in debt. During the first fiscal quarter of this year, the U.S. economy produced $32 trillion. We spend roughly $6.8 trillion per year, but only pull in around $4.8 trillion in earnings, creating an annual deficit of $2 trillion. And according to the Treasury Department, the U.S. last ran a surplus under president Bill Clinton in the late 1990s, and was last debt-free in 1835 under president Andrew Jackson. 

Before you dismiss our sky-high debt as the result of reckless, imprudent spending, there are many factors to consider as to why this number has ballooned since the Clinton administration. In 2001, the 9/11 terrorist attacks launched the nation into several expensive, decades-long wars in the Middle East. The global financial crisis of 2007-2008 led the nation’s housing market, and eventually economy, into a free fall. More recently, the global COVID-19 pandemic left global trade in a standstill as supply lines collapsed, oil prices skyrocketed, and inflation ballooned. To confront these crises, the federal government borrowed heavily, spending money it did not have. 

Beyond the concrete world events that caused our debt to skyrocket since the turn of the century lies the fact that our government is run by professional politicians, not economists. The modern political world in America is more divided than ever, as can be seen in this NBC News poll that shows nearly 80% of partisan voters believe that the other party “poses a threat that if not stopped will destroy America as we know it.” In essence, no one single solution to our nation’s 40 trillion issues will be accepted by either side, and any legislation on Capitol Hill will struggle to wiggle its way out of partisan deadlock. Another issue: politicians, as well as the average American, do not understand that issues relating to the economy like the national debt will not be solved in a matter of months or a year, but rather over decades and even beyond our lifetimes. This is understandably an uncomfortable thought, but nevertheless politicians can continue tossing around buzzwords or phrases like ‘cutting military spending’ or ‘we’re clamping down on fraud,’ but that will not stop or slow our debt problem. 

As mentioned above, the last time the U.S. experienced a budget surplus was during the years 1998-2001. This was due to an event known as the dot-com bubble. According to the Scholarly Community Encyclopedia, during the late 1990s the rise of the internet and modern telecommunications created a wave of investor enthusiasm throughout the economic world. Many new companies that specialized in this area, or had a website (hence the name “dot-com”), would receive massive amounts of speculative funding, meaning investors believed that this was the next once-in-a-generation opportunity. As a result, hundreds of billions of dollars flooded into the market. However, as time went on, the vast majority of these companies failed to produce the returns many investors hoped for. Investors began to notice, and opted to not continue these investments. Most of these newer tech companies would close or go bankrupt, and trillions of dollars would be lost. The dot-com bubble popped by the end of 2002, and investors had emerged more conservative with their financing. But for a time during its peak, with so much money flowing through the market, this new increase in revenue through taxes and other means (as well as several budget cuts made during the Clinton presidency), produced a budget surplus. 

Today, something similar is happening. In a Stanford University report, from 2020 to 2024 there was an estimated 1.2 trillion dollars invested into artificial intelligence. AI, of course, has been a major fixture in recent news reports. Many communities are loudly opposing the construction of AI data centers, triggering a grassroots backlash and a major public relations problem for AI companies. Not to mention, major AI companies have also been warning the public about the potential, possibly inevitable dangers of AI (see OpenAI chief executive Sam Altman and his address to the United Nations last month). This uncovers the dangerous new possibility of there being a new dot-com-esque bubble with AI, as well the consequences ahead when it pops.

But one thing is for sure: for the time being, the only way to escape our 40 trillion issues, or debt crisis, is through the sort of careful financial discipline our leaders on both sides of the aisle have refused to practice.