By Issues & Insights Editorial Board | August 25, 2026
It has been amusing to watch mainstream journalists (who’ve largely ignored the national debt crisis until it hit a nice round number of $40 trillion) try to explain how it’s all the fault of Middle East wars and tax cuts.
Somehow, the fact that federal spending has increased by nearly 300% over the past 25 years never enters the picture.
Instead, we get endless accounts about how President Donald Trump’s One Big Beautiful Bill Act will add $4 trillion to the national debt, and how previous tax cuts by Trump and George W. Bush are supposedly responsible for more than a third of the current debt.
The Wall Street Journal puts it this way: “Wars, the bursting of the dot-com bubble, and tax cuts sent budgets off course in the early 2000s.”
False. False. And False.
Wars: In 2001, the Defense Department accounted for 15.6% of federal spending. In 2015, it was 15.2%. This year, it will account for just 12.1%.
Dot-com bubble: Federal revenues did fall 11% after the bubble burst in 2000 and the economy went into a mild recession. But revenues reached a new peak in 2005.
Tax cuts: Federal revenues today are 159% higher than they were in 2000. They are on track to climb another 38% in the next five years.
So, no. None of those explain why national debt has gone from $5.67 trillion to $40 trillion since 2000, or why it’s doubled since 2017.
What does?
Well, take a look at the chart below. What do you see?
You will perhaps notice that over the past quarter century, tax revenues as a share of GDP have hovered right around 17.4% – which was the average from 1946 to 2000. All the Bush and Trump tax cuts did was keep revenues in that narrow range.
But look at spending. From 1946 to 2000, it averaged 19% of GDP. The last time there was a budget surplus, spending was below that long-term trend. Since then, it’s never been close.
And there were two massive increases in spending, thanks to Barack Obama’s failed “stimulus” and Joe Biden’s failed “rescue plan,” neither of which was needed and both of which were followed by sluggish growth.
In addition, both Obama and Biden expanded the entitlement state, which set the federal government on a permanently higher spending path. There were plenty of bipartisan spending splurges as well.
The result is that while revenues went up 159%, spending has gone up almost twice as fast.
To Democrats, this is just evidence that taxes are too low. But it would be impossible to raise taxes enough to pay for all this additional spending without crashing the economy, which would, in turn, suppress tax revenues and increase federal entitlement spending.
We got into this hole because politicians have been spending like there’s no tomorrow. The only way out of this hole is to cut spending. Or at least moderate its growth so spending as a share of GDP can return to its historic average.
That should be simple enough even for brain-dead corporate journalists to understand.
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