During Barack Obama's presidency the US national debt has increased from $10 trillion to over $17 trillion. Who is to blame and does it matter?
It is neither a critical issue at the moment nor is it the responsibility of the President that was elected immediately after a major recession or Depression. A funny thing happens after an economic collapse, government revenue drops considerably at the exact time that government is needed the most, spiking deficits to triple or quadruple, especially if you do the right thing and increase rather than decrease spending. Decreasing spending would definitely have deepened and prolonged the time it takes to recover.This particular collapse was somewhat unique in the history of economics, and we are very lucky that it was not worse and that it is turning around despite deceptively weak balance sheets for all three legs of financial institutions. Therefore, it was much more important that spending not be cut. On the other hand, the Bush tax cuts could be said to be exasperating the situation more than necessary, for there is no reason to believe that the trickle down effects are preventing things from getting worse and good reason to believe that they are at least fueling false fears about a worse structural problem than is a apparent. In which case, if we are talking about the increase of $7 trillion vs what would have been potentially an increase of $5 trillion, then the blame would have to be placed on the Republican House that refused to even consider violating the silly Norquist pledge. However, the truth is we were destined to have this level of debt regardless because, IF the House did agree to tax increases, it would probably have included a State revenue sharing proposal of an equal amount to stimulate selected regions.The good news is that, IF we can grow at normal fast recovery rate for the next five years, and reasonable tax policies are in effect, and minimum wage increased sufficiently to decrease preprogrammed food stamp, earned income credit, and housing subsidy programs, the short term deficit can be reduced in half and the long term fears diminished greatly.
Obama has nearly doubled the US national debt while claiming to reduce the deficit by about 70%. How is this possible?
Debt and deficit are two different things. Debt is what you owe, deficit is what you lose annually. If you win every year, it’s called a surplus. Your annual deficit is added to your debt while a surplus would be deducted.If your debt is already high, then you will have to pay a high interest annually. The interest becomes part of your deficit, so it is added to your debt. So once your debt has grown, it becomes difficult to reduce it. But really keep you eyes on the deficit, that is what matters.Actually you should look at your deficit relative to your GDP, Gross Domestic Product. That is because if your GDP grows a lot, should you be so lucky, it doesn’t really matter that much when your deficit or your debt grows a little bit. Your debt relative to GDP can fall even if the debt is rising. And that is fine.So both claims are right, the debt has risen, and it will keep rising as long as there is a federal deficit. It will only fall when there is a surplus.Do you demand a surplus?The current deficit is estimated to be around 3% of the GDP in 2016 (2.5% in 2015). In the last of Bush’s budgets the deficit was 9.8% of the GDP. This was in 2009 (the departing president leaves a budget for the coming president).So it has been reduced substantially during Obama’s presidency. Actually it was reduced every year, except between 2015 and 2016. I am not sure who should be credited for it (the congress has a say in the budget). But there is still a deficit (only Bill Clinton produced a surplus in recent years), and therefore the debt grows.Do keep a keen eye on the federal deficit (relative to GDP) from now on. That is a very good idea.
I think that President Obama raised the national debt by $9.3 trillion. How can anyone say he did a good job as president?
There are several things one has to remember when discussing the increased debt from FY “09 to FY ’17.On September 30, 2008 (last day of FY 08) the national debt was at 9.2 trillion dollars. Let’s remember this was 112 days prior to Obama taking office. During those 112 days America was in the middle of the 2nd largest economic collapse in US history. On January 21st 2009 the US national debt was at $10.6 trillion dollars. That’s an addition of $1.4 trillion that many on the right are charging to President Obama that was incurred before he even took office.Between Jan. 21, 2009 and the end of FY 10 (21 months) there was $3.9 trillion added to the debt which were expenses for expenses incurred before Obama took office. Including the actual cost of the two theater war which began in the fall of 2001 that Bush II had kept “off book” that Obama placed ON the books. Plus the costs of bank and corporate bailouts due to the economic collapse incurred during the previous administration.Federal dollars given to states to help alleviate unemployment benefits and well as the federal SNAP program, due to the millions of jobs lost during the economic collapse.Medicare cost mainly attributed to an aging population have attributed to $1.1 trillion in the national debt since FY ’09.Following FY ’11 the national debt began growing at a slower rate. This was due to 3 items. 1) Loan paybacks from GM and Chrysler, as well as an Energy department project investing in renewable energy manufacturing. (yes this was the program which began in 2005 under the GWB admin and remains today. This is the same program which received guff for the Solyandra bankruptcy. However, what many have not heard is that beginning in 2012 this program for the first time ever made a profit from repayment of loans given out during FY 2009/10.Beginning in 2013 the debt began growing at an even slower rate when the Unemployment rate dropped at a faster rate and more tax dollars came in.In FY 2016 the national debt grew $546 billion dollars. The lowest growth in the debt since FY 2005. In FY 2017 the debt grew $644 billion, an increase in the growth rate of nearly $100 billion. FY 2017 was the first year the debt growth rate grew from the previous year for the first time since FY 2012.The largest contributor of the national debt since FY ’05 has been decreased tax revenue following the tax cuts enacted in 2003.