The U.S. National Debt Under President George W. Bush

From Surpluses to Deficits

George W. Bush inherited a government running budget surpluses. His administration quickly reversed this trend through a combination of major policy changes and unforeseen crises. Early in his term, he signed two large tax cuts, arguing they would stimulate the economy.

The dot-com bubble burst early in his first term, leading to a recession. Then, the September 11th, 2001 terrorist attacks fundamentally reshaped his presidency and the nation's finances.

The War on Terror and a Financial Crisis

In response to 9/11, the U.S. launched the War on Terror, leading to invasions of Afghanistan in 2001 and Iraq in 2003. Unlike previous major conflicts, these wars were financed almost entirely through borrowing. At the same time, domestic spending increased with the creation of the Department of Homeland Security and the Medicare Part D benefit.

The final year of his presidency was dominated by the 2008 global financial crisis. To prevent a total collapse of the financial system, the Bush administration authorized the Troubled Asset Relief Program (TARP). This, combined with the crisis's devastating impact on tax revenues, led to a then-record deficit of over a trillion dollars.

The Debt in Numbers

The eight years of the Bush presidency saw a dramatic reversal of the fiscal trends of the 1990s. The combination of sweeping tax cuts, two unfunded wars, and a catastrophic financial crisis caused the national debt to more than double.