mental Nanotechnology: Applications and Impacts of
Nanomaterials. New York: McGraw-Hill, 2007.
Wolf, Edward L.Nanophysics and Nanotechnology: An
Introduction to Modern Concepts in Nanoscience. New
York: Wiley-VCH, 2004.
Alvin K. Benson
See also Computers; Genetic engineering; Ge-
netically modified foods; Genetics research; Inven-
tions; Medicine; Science and technology; Space ex-
ploration.
National debt
Definition The national debt is the total amount
of unrepaid money borrowed by the federal
government since it was created
The national debt increases the cost of government as it is
forced to pay interest to those who have loaned money to the
government. During the 1990’s the growth of the national
debt slowed.
During the 1980’s, federal budget deficits had
swelled the national debt beyond $2 trillion. As the
decade of the 1990’s began, the debt and deficit
became a potent political issue. President George
H. W. Bush negotiated a budget agreement with the
Democratic Congress intended to reduce the bud-
get deficit and slow the growth of the national debt.
The agreement, though, proved politically unpopu-
lar, and the debt issue ignited the third-party candi-
dacy of billionaire H. Ross Perot. The election of Bill
Clinton, with Perot’s help, was based partly on his
promise to reduce the deficit and with it the national
debt.
Clinton administration In 1993, Clinton pushed
through a series of tax increases with some of the ad-
ditional revenue going to reduce the deficit. Clinton
also reduced spending, mostly in defense, as part of
the “peace dividend” that was to save the federal gov-
ernment money after the collapse of communism.
During his first term, Clinton slashed defense spend-
ing by more than $30 billion or 10 percent. Yet even
with his tax increases and budget cuts, Clinton only
slowed the growth of the national debt during his
first term. From just under $3 trillion in 1992, the
debt exceeded $3.7 trillion by 1996, a nearly 25 per-
cent increase. This was the smallest percentage in-
crease in the debt since Richard M. Nixon’s first
term and represented a measure of success.
Clinton’s inability to seriously reduce the deficit
during his first two years in office made the national
debt an issue in the 1994 midterm elections. Repub-
lican candidates promised deficit reduction, mostly
through budget cuts, and a constitutional amend-
ment mandating a balanced budget. The Republi-
can sweep in 1994 turned the Congress over to the
party for the first time in forty years.Republican Congress In 1995, Congress passed a
series of measures to reduce or eliminate the budget
deficit and to gain control of the national debt. A
constitutional amendment mandating a balanced
budget was offered in the House of Representatives
but did not pass with the necessary two-thirds major-
ity. The amendment would have forced Congress to
pass a balanced budget every fiscal year but provided
little direction on how the amendment would be en-
forced. Also in 1995, Congress passed a stringent
budget for the 1996 fiscal year, cutting some federal
programs and holding others to zero growth. The re-
sult was a swiftly declining deficit and a flattening of
the national debt. Finally, Congress gave the presi-
dent greater authority in making spending cuts. The
line-item veto was approved, and it allowed the presi-
dent to eliminate excessive spending in a bill.
Clinton’s second term saw a flattening of the na-
tional debt. At the start of his administration, the
debt totaled more than $4 trillion, rising to $5.25 tril-
lion by the time of his reelection, but by the end of
the decade, the debt had increased less than 10 per-
cent to a total just above $5.5 trillion. The Asian fi-
nancial crisis contributed to a $130 billion increase
in the debt, the largest in four years.
The reduction in the debt led to changes in the
interest costs for government borrowing. The Trea-
sury Department announced that it was discontinu-
ing the long-term thirty-year bonds. The decision re-
duced government’s interest costs as the thirty-year
bond enjoyed a higher interest rate than the ten-
year bonds. The demise of the thirty-year bond fur-
ther lowered the interest paid by the federal govern-
ment as high-interest bonds from the 1970’s and
1980’s were retired and replaced by shorter-term
bonds and notes costing less. The Treasury also in-
troduced inflation-sensitive bonds. The bonds’ in-
terest rates were adjusted to include the inflation
rate but, because inflation was relatively low during602 National debt The Nineties in America