US National Debt

Started Dec 29, 2012 | Discussions thread
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US National Debt
Dec 29, 2012

Former Democratic Presidents (Bill Clinton, Jimmy Carter, Lyndon B. Johnson, John F. Kennedy, and Harry S. Truman) all reduced public debt as a share of GDP while the last four Republican Presidents (George W. Bush, George H. W. Bush, Ronald Reagan, and Gerald Ford) all oversaw an increase in the country's indebtedness.

US National Debt as a percentage of GDP was very high at 120% (worse than today) at the end of WWII. It fell sharply and pretty well continuously under Truman,  Eisenhower, Kennedy, LBJ, till it reached about 33% under Nixon. It went up a little under Ford, then fell back under Carter to about 33% again. Under Reagan, with his voodoo supply side economics ("Reganomics"), tax cuts, and total failure to balance the budget, it shot up again reaching about 53% at the end of Reagan's whole term in office and then up to 66% at the end of Bush I's term. Under Clinton, who did balance the budget, it fell back again to about 56% - and, in the last year of his presidency, Clinton was the first president since before WWII to actually actually have a negative growth rate for the National Debt.

Enter Bush II and the return of voodoo economics and tax cuts - and the US Deficit immediately starts to grow again 64% by the end of his first term and 74% at the end of his second term which is marked by the start of the worst financial crisis and recession since the Great Depression.

US National Debt by Presidential Term

History of the United States public debt

Of course the National Debt has continued to increase under Obama and is now at around 102% of GDP - but the year on year rate of growth of the National Debt went from 16.9% in Bush's final year to  15.1%,  13.9%, 7.8% and now 4.8% in the first four years of Obama - so he does seem to managed to have begun to slowly  turn things round.

The debt accelerated during Bush's last two budget years. Obama's debt is a continuation of that trend which happened because of the recession begun under Bush. Bush also set an all-time record by increasing the debt by $1.1 trillion in 100 days between July 30 and Nov 9, 2008.

Recessions cut tax revenues—in this case, dramatically. This accounts for nearly half of the deficit. Blaming Obama for the full deficit is like blaming him for not raising the tax rate to keep tax revenues up. Most of the increased spending is automatic increases in unemployment benefits, food stamps, and social security payments for early retirement. Very little of it is from his stimulus spending, and that seems to be over.
Republicans of course want to cut benefits, and social security - and keep Bush's tax cuts for the rich - just the sort of thing which didn't work before under Regan or Bush.

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