Recency Bias is the tendency for people to remember recent events more than past events, and to believe that the most recent situation has always been so. Put another way, people tend to frame their memories based on recent events, and to remember what they want - and likewise, to forget what they want.
I mention all this because it seems like lifetimes ago that the US national debt was not only in control, but people were actually talking about paying it off. That moment was 11 years, 1 month, and 1 day ago today.
Bill Clinton had just finished his term in the White House, stained by political scandal (ie. the Monika Lewinsky affair). Many viewed Clinton as a very unpresidential, even embarassing president. Yet, no one could deny the positive economics of his term. At the end of the Clinton presidency, the National Debt stood at 5.73 trillion dollars - a relatively small sum for the massive US economy. After three straight years of budget surpluses, economists were estimating how long it would take to pay off the National Debt completely.
Presidential hopeful Al Gore, for example, outlined an economic plan that would eliminate the National Debt by the year 2012. When candidate George W. Bush was asked if he had a similar plan, he said that although he agreed with paying off the debt in principal, he would not commit to a specific date.
Soon thereafter, Bush was elected as President. He immediately began a series of tax cuts for high-income families, which he (and his economic advisors) believed would stimulate the economy so much that the end result would be an overall increase in tax revenues (known as "trickle-down economics."); unfortunately, it didn't work . Tax revenues declined drastically with each cut.
Bush ran a budget deficit (increasing the national debt) in 7 of his 8 years in office. In 2003, he set a record for the largest annual debt increase in US history. Due to a combination of tax cuts and expensive foreign interventions, by the end of the Bush term the US National Debt had nearly doubled - from $5.73 to $10.69 trillion.
People now talk about the National Debt as if it was meant to be, always was, and always will be. Many cannot remember the time - not so long ago - when there was talk of the United States of America having no debt at all.
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"I've abandoned free market principles to save the free market system."
George W. Bush, 2008
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