As President George W. Bush took office, the U.S. economy was in the midst of a major stock market correction due to the overvaluation of many technology firms. The national debt stood at some $5.8 trillion. The "dot-com bubble," as it was known, had begun to burst the year before, and by March of 2001 the U.S. was in a recession. Six short months later, the nation would experience the single biggest shock since the Japanese attack on Pearl Harbor some 60 years prior. The attacks of September 11th would propel the nation into a decade long war, causing projected future surpluses to vanish from federal revenue. To keep the economy moving, Chairman Greenspan lowered the Federal Funds rate, allowing for money to be loaned at low rates throughout the economy. By the mid-2000's, cheap money, relaxed lending standards, and a booming housing market created a new economic bubble in America. Wall Street firms had helped fuel the real estate craze, and many Americans bought homes they could not afford with little or no money down.
Like all bubbles, the housing one would crash. By the end 2007, the United States would be in a recession. Venerable financial institutions, heavily levered to the housing market, would begin to collapse. By the spring of 2008, Bear Stearns was sold to J.P Morgan for a mere fraction of its former market value. Six months later, Lehman Brothers would file for the largest bankruptcy in U.S. history. Fannie Mae and Freddie Mac, two government sponsored entities charged with financing the mortgages of the housing market, fell into receivership. The stock market was in a free-fall, and the recession had spread around the globe. By the end of the Bush Presidency, the unemployment rate in the United States stood at 7.8%. The national debt had nearly doubled, standing at over $10.5 trillion.
As President Barack Obama took office, the United States was in the midst of The Great Recession, fighting two foreign wars while battling tremendous problems domestically. Budget deficits were now as far as the eye could see, and industries from the automakers to the homebuilders were shuttering or on the verge of doing so.
While the United States would eventually come out of the deepest recession it had seen since the 1930's, the recovery would come at a huge cost. Millions of Americans lost homes, employment, and trillions in the stock markets. Housing prices dropped, and regulation was set in place to avoid future lending bubbles. But as Standard & Poors downgraded America’s credit rating in the summer of 2011, demand for U.S. Treasury securities remained robust around the world. The 30-year Treasury Bond, which at been as high as 7% during the dot-com era, was at multi-decade lows. To be sure, the Federal Reserve was buying government bonds through a program known as quantitative easing, essentially expanding the U.S. money supply.
Foreign ownership of U.S. Government debt has grown over six-fold since the beginning of the millennium. From under $1 trillion in the summer of 2001, foreign entities now hold over $6 trillion in government bonds, with foreign governments holding some $4 trillion of that total. At of the end of the Presidency of Barack Obama, the national debt stood at $19.9 trillion. As of the Spring of 2019, the national debt under President Donald Trump stands at $22 trillion.