Why does the US have a debt problem?

In 2001 the Congressional Budget Office looked at the federal government's enormous budget surpluses and projected that the government's debt would be eliminated entirely by the end of the decade. By 2011 debt is at 70% of GDP, a level not seen since shortly after World War II. Republicans would have us believe that the reason is the Obama Administration's irresponsible spending policies. This graph, from Brad DeLong's blog, tells the real story: (1) Part of the surpluses in 2001 were a mirage due to inflated incomes at the top end during the internet bubble of the 1990s (2) The Bush administration cut taxes in 2001 and 2003, fought a couple of wars, increased other defense spending, introduced Medicare Part D without any means of funding... and as a result the debt reversed course. (3) The Obama Administration programs played a small role; ARRA for example is only 6% of the problem (and may actually have had a smaller impact on the debt because it increased GDP and therefore tax revenues beyond what they otherwise would have been).

Really nice graph.