National Debt

US National Debt GraphDebt Compared to National Income
Reagan got elected by telling the country the debt was "out of control." But, compared to national income, it was the lowest in 50 years. He probably didn't know. But his supply-side economists did, and they lied to America.
Bush senior knew they were lying and call it Voodoo economics—meaning: No, cutting taxes, would not raise more money and cure the deficit. Well, duh. They've tried this stunt twice, as you can see at the right, but much more clearly on the full National Debt Graph.

zFacts-Reagan-Not-Congress.png

Was it the Democratic Congress?

Conservatives have long been [#embarrassed] by Reagan running the debt up and out of control, so they made up a cover story — "the Democratic Congress did it." But as this graph shows, Congress changed the presidents' budgets only a tiny bit, and mostly down not up — Congress reduced Reagan's spending by $16 billion over his eight budget years. In spite of Congressional reductions, Reagan increased the debt by $1,860 billion. Blaming that on Congress is just political deception.  More + Documentation

zFacts-Reagan-Bush-National-Debt.gif

The $12 Trillion Republican Debt

What if Reagan and the Bushes had balanced their budgets?  It's easy to find the answer. The Treasury records the "debt to the penny" almost every day, so we can get most of the answer by just looking up the debt on the first day of Reagan's first budget and subtracting that from the debt on the last day of Bush senior's last budget. Do the same for G. W. Bush. That comes to $9.5 Trillion, and then there's some interest. It's amazing what the supply siders did to the Republican party — once conservative, now radical revolutionaries.

zFact-WWII-boom.gif
See Slide Show and Video

Debt, Jobs and WWII (slides & a video)

In the Great Depression business conservatives scared people about inflation (there was none) and about government borrowing (tiny until WWII). And that's why the Great Depression lasted 12 years. Then came WWII and the the US started to [#borrow and spend like crazy]. The effect was immediate, and the economy rocketed from depression to [#super boom].

Two slide shows and a video explain where our debt came from and why the supply-side debt makes it much harder for us to use spending to get out of this recession.


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[#PopNotes]

[=embarrassed] By 1987 Ron Paul was asking "How is it that the party of balanced budgets, with control of the White House and Senate, accumulated red ink greater than all previous administrations put together?
[=super boom] And, no this was not because our competitors were flattened, that was latter and it hurt of economy. We spent a lot helping them reconstruct and there was no one to buy our exports. When you hear someone give this excuse you know they started with their conclusion and just made up a "reason."
[=borrow and spend like crazy] Back in WWII we had real Patriots. They loved Uncle Sam and they bought war bonds to help him borrow to win the war and put America back to work. Now those who hate Uncle Sam (even though they say we have the best government in the world) call themselves patriots. But they have simply been duped by the Koch brothers and Wall Street.
[=PopNotes] Just hover over green-underline links above to see the "pop" notes.

 

US National Debt Graph

The best odds on the presidential election come from the betting markets and can be found here.

US-national-debt-GDP

In 1981, the supply-siders commandeered the Reagan Presidency and employed their Voodoo economics, as Bush senior had called it in 1980. He was saying that tax cuts would not increase government revenues. As you can see on the graph above (get it on your smartphone [#app info]), the Voodoo failed just as Bush predicted, and the supply-siders turned a 32-year winning streak into a debt disaster that continues to this day. For 20 years, under Reagan and the Bushes, the national debt increased compared to GDP every single year. In most other years it decreased. Twenty years in a row can't be just an accident, but to understand you need to learn the voodoo strategy.   (Why graph Debt / GDP ?)

What's causing today's huge deficits? Deficit basics. Top 4 deficit causes.

Bush senior fought against supply-side debt, so the Republicans didn't support him and he lost to Clinton, who put an end to supply-side economics. G. W. Bush brought it back full strength, with V.P. Cheney saying "Reagan proved deficits don't matter." Currently supply-siders are in full control of the Republican party.

What about Obama? Notice how the debt accelerated during Bush's last two budget years. Obama's debt is a continuation of that trend and neither Bush nor Obama are directly responsible for that acceleration. It happened because of the recession. Bush set the all-time record by increasing the debt by $1.1 trillion in 100 days between July 30 and Nov 9, 2008—but that had little to do with his choices.

Recessions cut tax revenues—in this case, dramatically. That accounts for nearly half of the deficit. So 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 stimulus spending, and that's over.



The green line shows what would have happened to the national debt if Reagan and the Bushes had balanced their budgets as Reagan claimed he would. G.W. Bush, in all modesty, claimed he would "retire nearly $1 trillion in debt over the next four years. This will be the largest debt reduction ever achieved by any nation at any time."

Republicans are quite [#embarrassed] by this performance, so they have invented a cover story: The Democratic Congress did it. Nice try. But for 12 of the 20 years the Congress was not Democratic. Also, presidents can veto, and when it was Democratic, Congress passed smaller budgets on average than the Republican Presidents asked for. Presidents propose the budget, and they have the most influence. Check it out.


The Election. ZFacts' new Reality App has this graph, amazing facts (e.g. who ran the debt up by more than $1 trillion in 100 days), and much more. To see and install it on your mobile, browse to zFacts.com/vote . If you're on a PC/Mac click here.

If Romney is elected, the debt will continue to rise the same reasons it went up under Reagan — more military spending and tax cuts for the rich. Obama will follow Clinton's path, but will have a harder time of it, because this recession is far worse than the one Clinton faced when he took office.


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[#PopNotes]

[=embarrassed] By 1987 Ron Paul was asking "How is it that the party of balanced budgets, with control of the White House and Senate, accumulated red ink greater than all previous administrations put together?"
[=app info]

Get this graph with the Reality App

Includes 14 graphs and simple explanations. Plus the most accurate election prediction anywhere, updated daily. Works on anything with a browser. More info and see it on zFacts.
 
[=PopNotes] Just hover over green-underline links above to see the "pop" notes.

 

Why Debt/GDP ?

GDP is Gross Domestic Product — the value of everything "made in America" from pizza to the Blue Angels' air shows. So this is the best measure of how rich the country is just in terms of the economy.

Now here's the case for comparing national debt to national GDP:

  1. It's the standard approach
  2. Originally I got most of the numbers right off Bush's White-House web site — pre-calculated.
  3. You can get them from [#any OMB budget] or any Economic Report of the President.
  4. Both debt and GDP are measured in unadjusted dollars.
  5. When you divide, the dollars cancel out, so inflation has no effect, and cannot distort the answer.
  6. It's sheer lunacy to say $997 billion debt in 1980 was far bigger than the $269 billion debt in 1946, because in 1981 the economy was 13 times bigger when measured in dollars.

What matters is how big your debt is compared with your income. A 12-year old with a $1000 debt is in deep trouble, but a 30-year old with a $200,000 mortgage and a $600,000 a year job is in no trouble at all. When Reagan said the 1981 debt was "out of control" at 31%  of GDP, it was like saying someone with a $200k mortgage making $600,000 a year has an out-of-control debt. It was just plain nuts. Yet the press never figured this out, so he got away with it.

In reality, Reagan started with the lowest debt (compared to our ability to pay) at any time in the last 50 years. And even in 1946, when the debt was at 121% of GDP, the country was in no trouble at all.

 


[#PopNotes]

[=any OMB budget] The Office of Management and Budget, at the White House, publishes the president's proposed budget every year, and one appendix always list the historical debt/GDP values. It's the same for Republicans and Democrats, because it just makes the most sense.
[=PopNotes] Just hover over green-underline links above to see the "pop" notes.

 

WWII Spending

Ground was broken for the Pentagon on September 11, 1941, and the Japanese bombed Pearl Harbor on December 7, 1941. So war-time spending started early. GM reportxlnk.gif producing trucks for WWII in 1940. But 1942 was when spending really took off. So here's what happend to GDP and Unemployment.

  GDP Growth Unemployment xlnk.gif
Debt Growth
[#Relative to 2011]
1940 – 1941 15.7% 14.6% – 9.9% $0.8 Trillion
1941 – 1942 16.9% 9.9% – 4.7% $2.5 Trillion
1942 – 1943 15.1% 4.7%  – 1.9% $5.4 Trillion

Notice that stimulus spending works more easily when there is high unemployment. It stops working when everyone is employed. It's hard to say how effective the 2009 stimulus was but it seems to have been about as effective when the differences are accounted for. The economy was in free fall when it was passed. It is hard to know how much worse it would have gotten without the stimulus spending and without the confidence that government was stepping in to get things under control.

Also, the 2009 stimulus package, although about $0.8 Trillion in total was spread out over several years. So it was not nearly as strong in any one year as even the first year in the table above. On top of that, the 2009 stimulus was, in large part, tax cuts which are not fully spent and so are much less effective that the direct, rapid government spending of WWII.

GM-6x6-Trucks.jpg
ca. 1942 GMC CCKW 353
6x6 Military Personnel Carrier

Although conservatives like to argue that the WWII spending had nothing to do with reducing unemployment, this seems preposterous. For example, GM tells us: "From 1940 through 1945 GMC built over 528,000 6x6 military trucks." To build those it had to hire people first to build the plants and assembly lines and then to build the trucks. How could hiring all those people not reduce unemployment? And then of course there was building the Pentagon, the Navy and the Airforce. All of the hiring happened because of goverment spending.

For economists: A new analysis of the multiplier effect of government spending find it too be quite large.

 


[#PopNotes]

[=Relative to 2011] The increase in debt was divided by the GDP to get the debt increases as a percent of GDP. That percentage was mulitplied by todays $15 Trillion GDP.
[=x] 
[=PopNotes] Just hover over green-underline links above to see the "pop" notes.

 

Save or Borrow?

Going into WWII, America put America Back to Work
So what's stopping us now? (September 10, 2010)

Should we start paying down the debt now, or wait? It sounds so obvious. Of course, start now. But what does that mean? Either (1) more taxes, or (2) less spending. That easy -- less spending. Right?
That means fewer jobs and more unemployment — at the worst possible time! But why not just cut government waste? Even if it were possible to cut only waste, it would cut just as many jobs! Anytime the government spends money, it (1) hires people, (2) buys things from private business, or (3) hires private companies. Wasteful or not, all of those actions provide jobs, and cutting jobs causes even more unemployment.
What do you do if you find yourself wasting money? Right-wing extremists write to say I favor wasting money. Nonsense. I'm an economist. Our #1 mantra is Efficiency! Ask yourself, if you stop wasting money on microwave popcorn, does that mean you must spend less. No. You can spend your money on something useful instead. Why don't conservatives get that?
No one really thinks going into debt is a bad idea -- everyone wants to buy a house. That means debt. But use debt wisely.
There's a time to save and a time to borrow. We should save for a "rainy day," and when it comes we should use what we saved. This is conservative wisdom, instead of conservative nonsense. And if you have a mortgage, you are in debt. So using you're savings means your net debt (debt minus savings) will grow -- right when you have rainy day. And you will pay down your debt on sunny days.
Not surprisingly, if you study advanced economics, that's exactly what you learn is good for the economy. Presidents should pay down the debt in good times, so the government can borrow when Americans are out of work and the economy needs some help.
But will the good times every come? Of course. And they have come. Right after the Reagan recession there was the Reagan boom. Incredible growth -- 7% in one year. The perfect time to pay down government debt. But check the graph. Reagan and then H.W. Bush grew the debt like crazy all the way until the next recession! Then, did they spend extra to help America recover? No.
Clinton got his turn. After the economy pulled out of the H.W.-Bush slump he immediately started paying down the national debt check the graph. Then it was W. Bush's turn. The economy hit a recession and he started deficit spending -- mostly by cutting taxes to the rich, which does not help much. And when the economy recovered, that was his chance to help with the debt. Did he pay down the debt? Not at all.
Have Reagan and the Bushes run up so much debt that we cannot afford to help the economy?

Fortunately no. America is so strong we can afford enough spending to pull out of this terrible recession soon. In fact not pulling out will cost us the productivity of 10 million Americans for years to come. And it will cost the unemployed and their families who did not cause the recession untold heartache, and in many cases an undeserved loss of self respect.=]

We should be half as brave as America was going into WWII, and pay what it takes to end this recession now. Then we should be as brave as the Republicans and Democrats from Truman through Carter who paid down the war debt. And we should never again let the Republicans run it up just to score political points against our government and to favor the rich.

 

Debt ? Deficit

A lot of people ask a question like this:

Great video, However, in the video you include Jimmy Carter as reducing the deficit.  As much as I like Jimmy Carter, his administration started out with a deficit left over from Ford of $ 77 billion and ended up with a deficit of $ 85 billion.  If I’m wrong let me know.

The Answer:

Off the top of my head, I think you are, as you say, talking about the deficit. The video is about the debt, and more specifically about the debt as a % of GDP. So I think you are probably right about the deficit. That's how much the debt increases from one year to the next (and there are various definitions of debt--I use the one the Republicans use and put on the national debt sign in NY -- the big one).

OK, so your deficit numbers tell us hat the debt was going up every year -- what gives? Well that's right, but the countries income was going up every year. Under Carter is was going up really fast because of inflation > 10% and normally the economy grew (in a real sense -- inflation is fake growth) by 3%. So over 4 years the economy got much bigger.

So even though the debt was getting bigger,  we were getting bigger much faster. When you are 10 years old, a $1000 debt is a big deal. When you're 30, you many have a $100,000 mortgage and that may be not a problem at all. You are far bigger economically when you are 30, so a much bigger debt is, in effect much smaller.  Watch the first part of video again. It explains a little more.

Also the $85 billion was probably worth a lot less than the $77 billion due to inflation.

Deficit

President Bush claims that "we have now achieved our goal of cutting the budget deficit in half."  [#Source] Is this true?

First, be careful, the deficit is annual additions to national debt. So all he's saying is that the national debt is not going up as fast as it had been. It's certainly not going down (as it did in between 1995 and 2001 — see graph). So in terms of the accumulated national debt, we haven't cut anything except its rate of increase (that's better, but the debt is still headed the wrong way).

Second, he's not talking about the annual gross (total) budget deficit, but only a part of it. As this chart shows, the total deficit has hardly decreased at all.  [#note]

 

 

-Gross-National-Deficit
 

Bush's deficit, call it deficit 'lite', counts borrowing from the 'public' (financial markets) but does not count borrowing from Social Security--which is huge. This ignores the fact that like public debt, Social Security contributions are actually an obligation that must be repaid. Most importantly, those funds should be helping to increase savings and investment in order to provide for the coming retirement of the large "baby-boom" generation. They should not be used for current government expenses (see below).

Did Bush's "pro-growth" policies cut the deficit lite in half? No. The deficit always goes up in a recession (2001--2003) and down when the economy recovers (last two years). To check on his policies, look at what actually happened compared with what he predicted his policies would do.  ( Graph )

If one counts Social Security contributions as offsetting the deficit, then the deficit lite has gone down by almost half, from $413B to $248B. But that's just a normal result of increased Social Security contributions, which, as pointed out above, are themselves an obligation that must be repaid.  The real total deficit, the gross national deficit, is still near a record high. That's not normal.

 

Bush almost cut "deficit lite" in half, but the real total deficit is still taking billions from Social Security. more

Deficit "lite" vs. the gross deficit
The gross deficit is the real "total deficit." Unfortunately, politicians talk about a smaller partial deficit, but call it the "total deficit," so you won't ask about the the real one. I'll call it "deficit lite" and I'll call the real one the "gross deficit." 

The gross (total) deficit is bigger because it takes into account that when the fed's general fund (mostly military spending) borrows money from the Social Security Trust Fund, it will have to pay it back. Borrowing from Social Security is still borrowing. Deficit lite, which Bush is talking about, assumes there is no such obligation — that Social Security will not have to be paid back. So the more they borrow from Social Security the smaller is deficit lite.

Because of this, when more of us have jobs and pay more Social Security, deficit lite goes down because the general fund borrows more from Social Security — which they don't admit they have to pay back — and less from the public (and foreigners) — which is the only part they admit they must pay back.

 

-National-Deficit-Lite
 

How can they call "deficit lite" the "total deficit"?
As you might expect, it's a bit confusing. The "deficit lite" is basically the gross (total) deficit (military spending, etc.) plus all the extra money that comes in from Social Security. Since the Social Security surplus is added, they call this sum the "TotalDeficit." 

This is what's happening. The gross deficit is about $550B and when you subtract$300B coming in from Social Security you get the $250B deficit lite. Tastes better.

But subtracting does not sound like you're getting a total. So they turn it all upside down. They say the gross deficit is minus $550 and then they add the $300B from social security, and get minus $250. Since, with signs reversed, they are "adding" they call their answer of -$250B the "total" deficit even though its much much smaller than the gross deficit, which is the real total deficit.

You can check out this charade in the Economic Report of the President, Table B-78. (Economists put up with this because (1) they're paid to, (2) they have a legitimate use for the deficit lite number, and (3) their political bosses love it.)

 
 

The annual deficit vs the national debt
The annual deficit is this year's spending minus this year's income. If we spend $900B with income of $600B in one year, the annual deficit is $300B. That makes the national debt go up by $300B.

The annual deficit is how much the debt increases each year. On any day we can ask how much the annual deficit was over the preceeding year and find it by subtracting the national debt a year ago from what it is now.

That's how the graphs above were made. You can find the national debt to the penny herexlnk.gif for almost every day back through 1993.

 

[=Source] Bush's press conference, October 11, 2006

"Before I take your questions, I'd like to discuss a couple subjects.
 
First, I want to briefly mention that today we've released the actual budget numbers for the fiscal year that ended on September the 30th. These numbers show that we have now achieved our goal of cutting the federal budget deficit in half, and we've done it three years ahead of schedule.
 
The budget numbers are proof that pro-growth economic policies work. By restraining spending in Washington and allowing Americans to keep more of what they earn, economy's creating jobs and reducing the deficit and making our nation a more prosperous nation for all our citizens." (NYTs)
[=note] This chart shows the total deficit in dollars, although it would be more correct to show the deficit as a fraction of total economic activity (for example, Gross Domestic Product -- new chart coming!).  Since total economic activity has only changed by a few percent per year recently, the overall picture will be quite similar to what this chart shows.
 
 
 

 

Why It Matters

Currently, contributions to Social Security are greater than payouts because members of the large baby-boom generation are currently in their prime earning years. But the baby-boomers are about to start retiring. In fact, an increase in the Social Security tax was passed just to help fund their retirement.

This money should be saved/invested in order to make it easier for the younger generation to support the baby-boomers after they retire. How could this happen? If the rest of the government budget was in balance then the current excess of Social Security contributions over payouts would result in more investment.

Here's how a surplus produces investment: an excess of Social Security contributions over payouts (assuming the rest of the government budget in balance) would be used to reduce outstanding debt. That means buying back bonds. That means more money in the hands of former bond-holders, who clearly were interested in saving the money, not spending it. To save that money they'd buy corporate bonds or stock, or put in the bank, etc., all of which would encourage more investment in real, productive assets. Investment now means increases in productivity in the future. A more productive younger generation would have an easier time supporting the soon-to-be-large number of retirees.

That's why it's important to look at the real deficit that does not include Social Security contributions in excess of payouts. The current deficits indicate that the government is spending far in excess of revenues, thereby more than offsetting intended Social Security saving.  And, as the annual total deficit graph shows, the situation is not improving, even after a recession.

The reasons for the annual total deficit continuing at near-record levels — even after a recession — are not hard to find: (1) huge tax cuts; (2) Iraq war expenditures.

Reagan's Mistake

How could Reagan mistake the lowest national debt for the highest?

zFacts-2005-Nominal-Debt-Reagan.gif(Or was it on purpose?)

He forgot inflation and forgot the US was growing—size matters.
This graph compares the size of the Gross National Debt (the blue line, $T) with a typical part of the U.S. economy — spending on furniture. The vertical line (1979) is when Reagan got it backwards.
As can be seen furniture spending was at an "all time record high" in 1979, just like national debt. Was America going crazy on furniture? Was the debt going crazy? No. No. The country was just getting bigger and richer, and dollars were worth less. The debt was actually shrinking relative to the national income. That's why you can see furniture pulling way ahead of the debt when Reagan was elected. The whole economy was pulling ahead of the national debt. That's not a problem -- quite the reverse.
The most popular national debt web sites are still making Reagan's mistake.
The debt grew rapidly during World War II, but its growth during peace-time prosperity, starting in 1982, was unprecedented.

 

Debt Confusion

See the real US national debt graph here.

The most popular national-debt web sites continue the same confusions that caused Reagan to believe the national debt was higher than ever when it was at its lowest point since before World War II. Here is what you see when you look at the debt in nominal dollars.

Brill-nom-US-national-debt.gif

The misleading nominal-dollar graph shown above comes from the Brillig site. That site has been reminded (via email) of the effects of inflation and as a result has corrected for it by adding the following graph. But this graph still ignores population growth and the fact that the country has gotten a lot richer in the last 50 years. The result is still tremendously misleading, but at least now you can see the Reagan rise and the Clinton dip.

Brill-deflate-US-national-debt.gif

The nominal Gross Domestic Product (GDP) takes all of these effects into account. It grows with inflation, population and increased income. By comparing the national debt to GDP, we get a fair check on whether it is growing or shrinking relative to what we can afford. That is why the White House web site give gross national debt as a percentage of GDP, which is what I have plotted on the page above.

Republican Debt

US-national-debt-GDP
This page explains
[#the green line]

  Republicans blame the "Democratic Congress" for their debt increases. The trouble is that Congress was only Democratic 8 out of the 20 years, and in those 8 years, on average, Congress passed smaller budgets than the Republican presidents requested. The specifics are all right here: It Was the Republicans.

So, let's add up the debt under Reagan and the Bushes. We can't blame Reagan for the debt's increase until his first budget took effect, October 1, 1981. Then, for 12 years until Sept. 30, 1993, the Republicans ballooned the debt. Later, George W. Bush took over.

  • Under Reagan and Bush: $3.4 Trillion increase in the debt.
  • Under George W. Bush: $6.1 Trillion.[#1]
  • Total:  $9.5 Trillion. (without counting interest)

But wait, there's interest on that debt ... continued below the graph.

Reagan-Bush-National-Debt
The debt went up during Clinton's years only because of $2.2 Trillion interest on the Reagan-Bush debt. Otherwise Clinton would have paid off most the remaining WWII debt. G.W.Bush got [#sand-bagged] by Reagan.

Just like a mortgage, the debt incurs interest, so the Reagan-Bush-I debt grew during the Clinton years. The average debt interest rate in those years was about 6.5%, which would increase it over 50% without compounding, but with compound interest the total debt – including interest – increased by $2.2 trillion.

  • Total Republican debt from above: $9.5 trillion
  • Interest on Reagan-Bush debt under Clinton: $2.2 trillion
  • Interest on $11.7 trillion after G. W. Bush: $0.3 trillion
  • (detailed calculation)
  • Grand Total Reagan-Bushes Debt:  $12 trillion (as of Sept. 30, 2010).

If the Republicans had not run up this $12 trillion debt, we could easily have pulled out of the Great Recession.


PopNotes used above:

[=1]Stimulus
The Obama stimulus package spent $36 billion ($0.036 trillion) before the end of Bush's final budget years. This has been subtracted.
[=the green line] The Green Line on the graph above shows what the debt would have been if Reagan and the Bushes had balanced their budgets. (Full-size graph)
[=sand-bagged] Not as Bad as He Looks
Almost half of the debt that Bush II ran up was from interest on the Reagan-Bush-I debt, but it was still all Republican.

 

Congress? No.

Conservatives are embarassed by the way Reagan and the Bushes ran the debt up and out of control. So they have invented a cover story: The Democratic Congress did it. I have run into this lie dozens of times. So, I dug deep to set the record straight.

zFacts-Reagan-Not-Congress.png

As the figure shows, Reagan and Bush senior got almost exactly the budgest they requested in each of their 12 budget years.

  • Reagan:
  • The first budget — passed by all Republicans and a few conservative Southern Democrats.
    • This increased the debt by [#$144 Billion].
  • The next 5 budgets — passed by the Republican Senate and signed by Reagan.
  • The last 2 budgets — passed by a Democratic Congress
    • Totalled slightly less than Reagan requested.
  • G. H. W. Bush:
  • Democratic Congresses under Bush passed smaller budgets than he requested in 3 out of 4 years.
  • These four Democratic budgets totalled  $14.6 Billion less than Bush requested.
  • G. W. Bush:
  • The first two budgets — Senate was split 50/50 and the House was Democratic.
    • Bipartisan and totalled $20 Billion less than Bush requested.
    • The biggest cause of deficits was Bush's enormous tax cut, mainly for the rich.
  • The next 4 budgets — the Congress was solid Republican.
  • The last 2 budgets — [#Bush vetoed] modest Democratic attempts at spending. 

In summary: Democrats controlled Congress during 8 out the 20 years. During 4 of those years, Democrats decreased the budgets proposed by the Republican presidents. Their total effect during those 8 years was to reduce Republican budgets by $17 Billion (which is only 0.2%).


Sources:

  I finally tracked down exactly what Congress did. There were a few scattered cites on the web to a mysterious House report from 1992, but I could never find it., So a few days ago, I pulled together my best clues and wrote to the help desk at the Library of Congress. They nailed it in less than a day. Amazing. There is no such report, but they found a table with that name that is published annually and has all the budget results going back to the 1920s or so. (From the government printing office.xlnk.gif)

You can read  in Time magazinexlnk.gif  how Reagan outmanuevered the Democrats to get his first budget passed. This is the budget that ended the 32 year payoff of the WWII debt and sent the national debt spinning out of control (except for a brief turn-around under Clinton).

 

From the G. W. Bush White House: The Reagan-Bush Debt Explained

"The traditional pattern of running large deficits only in times of war or economic downturns was broken during much of the 1980s. In 1982 [Reagan's first budget year], partly in response to a recession, large tax cuts were enacted. However, these were accompanied by substantial increases in defense spending. Although reductions were made to nondefense spending, they were not sufficient to offset the impact on the deficit. As a result, deficits averaging $206 billion were incurred between 1983 and 1992. These unprecedented peacetime deficits increased debt held by the public from $789 billion in 1981 to $3.0 trillion (48.1% of GDP) in 1992." [emphasis added]

From "Historical Tables, Budget of the U.S. Government, Fiscal Year 2006." Downloaded from www.whitehouse.gov/omb/budget/fy2006/pdf/hist.pdf. Page 5.

 


[#PopNotes]

[=$144 Billion] The previous record, $90 Billion, was set the year before by Carter.  That was only $3 Billion higher than the record set by Ford.
[=Bush vetoed] WASHINGTON — President Bush vetoed another children’s health bill on Wednesday, effectively killing Democrats’ hopes of expanding a popular government program aimed at providing insurance to youngsters in lower- and middle-income families. (December 13, 2007)
[=PopNotes] Just hover over green-underline links above to see the "pop" notes.

 

G. H. W. Bush

The 1990 budget deal, in which President George H.W. Bush formally went back on his "No new taxes!" pledge and cut a sweeping deficit reduction deal with congressional Democrats. It ended up haunting Bush in varying ways for the rest of his presidency.

The '90 agreement was the product of more than six months of negotiations between Bush and a bipartisan group of congressional leaders. Deficits were soaring and Democrats, who controlled both houses of Congress, demanded that any plan include a significant revenue component. Despite his '88 rhetoric, Bush had always been more of a pragmatist and was willing to go along, and so were Bob Dole and Bob Michel, the pragmatic conservatives who led the GOP in the Senate and House.

The drama unfolded in two phases. In the first, a plan was drawn up that relied heavily on fees, excise taxes, cuts in social welfare programs, and new restrictions on tax deductions. The aim was to cut the deficit by $500 billion over five years, and the idea was for Bush to be able to say that he hadn't raised income tax rates on anyone -- and to keep conservative Republicans, particularly in the House, in line. But this ended up infuriating Democrats, who believed the deal put far too much of the burden on middle- and lower-income Americans. At the same time, conservatives in the House -- urged on by a rising star named Newt Gingrich -- still rallied in opposition. In early October '90, the deal went down to defeat in the House by a 254-179 margin. A majority of Republicans (by a 105-71 margin) and Democrats (149-78) opposed it.

This triggered a brief government shutdown and a sharp drop in Bush's approval ratings, which had been almost unnaturally high during his first two years on the job. With the midterm elections approaching, Bush then compromised further with Democrats, who had majorities in both chambers, agreeing to a plan that shifted more of the burden to the wealthy by raising the top marginal income tax rate from 28 to 31 percent.

A full-scale revolt from the right ensued, with conservative leaders branding Bush a sellout. When the new deal came up for a vote, the partisan divide on Capitol Hill was clearer. In the House, Republicans overwhelmingly opposed their own president's plan by a 126-47 margin. Democrats backed it by a 181-74 spread. It passed the Senate, where the GOP's ranks weren't as conservative, on a 54-45 vote and was signed by Bush in early '90.

To the anti-tax right, all of this served to confirm their long-held suspicion that Bush wasn't really one of them. He'd run for president in 1980 as a moderate Republican, deriding the supply-side theory that Ronald Reagan championed as "voodoo economics." At that time, Bush's wing of the GOP was still a force, but Reagan's was the future. By the end of the decade, supply-side theory had become GOP gospel, and Bush had reinvented himself as a true believer. This was the backdrop for his "Read my lips: No new taxes" proclamation at the party's 1988 convention. It was all enough to convince conservative leaders to put their doubts aside and to help Bush succeed Reagan.

But Bush, with the '90 budget, showed that he'd been faking it -- a fact that one conservative voice after another was happy to point out.

George W. Bush

Former Treasury Secretary Paul O'Neill was told "deficits don't matter" when he warned of a looming fiscal crisis.

O'Neill, fired in a shakeup of Bush's economic team in December 2002, raised objections to a new round of tax cuts and said the president balked at his more aggressive plan to combat corporate crime after a string of accounting scandals because of opposition from "the corporate crowd," a key constituency.

O'Neill said he tried to warn Vice President Dick Cheney that growing budget deficits-expected to top $500 billion this fiscal year alone-posed a threat to the economy. Cheney cut him off. "You know, Paul, Reagan proved deficits don't matter," he said, according to excerpts. Cheney continued: "We won the midterms (congressional elections). This is our due." A month later, Cheney told the Treasury secretary he was fired.

The vice president's office had no immediate comment, but John Snow, who replaced O'Neill, insisted that deficits "do matter" to the administration.


The economy, growing at an annual rate of 3.5 percent to 4.0 percent, is hardly in need of further fiscal stimulus. Yet the budget that the president sent to Congress last week promises deficits as far ahead as the eye can see--if the eye is practiced in reading these massive documents.  --The Weekly Standard (very conservative), Feb. 14, 2005.


"It [this new approach] will retire nearly $1 trillion in debt over the next four years. This will be the largest debt reduction ever achieved by any nation at any time. It achieves the maximum amount of debt reduction possible without payment of wasteful premiums. It will reduce the indebtedness of the United States, relative to our national income, to the lowest level since early in the 20th Century and to the lowest level of any of the largest industrial economies."
–George W. Bush, Feb. 28, 2001
President's Message to Congress 

Voodoo Economics

Voodoo Economics, as George H.W. Bush named it in 1980, is what caused most of our national debt. It came from Wall Street and goes by the name "supply-side economics." Here's where you can find out about it.
More Voodoo-Economics Information:

Voodoo versus Republican:

The debt problem comes from Wall Street supply-siders taking over the Republicans. Ike, Nixon and Ford, all good Republicans, brought the debt down 11 out of 16 years. supply-siders brought it down 0 out of 20. That's batting 688 versus batting 0. And G.H.W. Bush was no supply-sider — he called it voodoo economics. He just got trapped by Reagan's supply-side policies. He passed a tax increase trying to partially undo Reagan's damage, but the supply-side Republicans turned on him, and he was not re-elected.
So supply-sides are far from traditional Republican balanced-budget values. Cheney, a supply-sider, said "Reagan proved deficits don't matter." Unfortunately the supply-siders have now pretty much captured the Republican party.
 

What is Supply-Side "Economics" ?
Supply-side economics was started by the the Wall St. Journal opinion editor, Robert Bartley and his right-hand man Jude Wanniski. They worked with two economists, Arthur Laffer and Robert Mundell. But Bartley took the lead, and much of supply-side economics was developed by him and Laffer at a series of dinners at Michael 1, a posh restaurant a few steps from Wall Street.
They viewed it as an attack on Keynesian economics, which described how to get out of a depression by having the government increase demand for goods and services from the private sector. This is how we got out of the Great Depression during World War II (though Keynesian economics does not suggest war as even a possible policy measure). Since Keynes focused on the demand side, Bartley and Laffer focussed on the supply side (remember "supply and demand") and call their theory "supply-side economics."
In a nutshell, Keynesian (demand-side) economics, says that when a country is in a recession, it's because businesses don't have enough business. That is, people are not buying as much as usual, so they can't sell enough, so they lay people off, and then the people who are laid off, or are afraid of being laid off, buy even less. To get things going, we need something to increase demand. Conservative economists tend to say -- have the Fed reduce interest rates so people and businesses will borrow and spend more. Liberal economists tend to say have the government cut taxes for the poor, because they will spend, or have the government borrow and spend more to help business get started again.
The right answer, is that in a regular recession, monetary policy works and is much easier to use so that is best. But in a terrible recession or a depression, the interest rate goes down to about zero and can't go any lower, so then monetary policy stops working. Then you need Keynesian economics -- like the spending for World War II>
Both conservative (monetarist -- like Milton Friedman) and liberal (Keynesian) economists say that the government needs to stimulate demand in a recession. But the two "supply-side" economist say both are wrong, that we need to give tax cuts to the rich and then the rich will be stimulated to work much harder and they are the ones who are most productive and that will make the economy hum again. Laffer drew his famous "Laffer curve" to try to prove this point (but it is just plain silly). It claims that if the government cuts their tax rate, the rich will make so much more money that they will pay more taxes not less. It also claims that if you cut the tax rate for the bottom 98% of the population this won't happen.
So this was tried under Reagan. Big tax cuts for the rich. And G. W. H. Bush called this "voodoo economics," because only two economists believed it (or at least they often said they did), and because the idea that cutting taxes for the rich would collect more money not less. Of course it never worked, and that's one reason the supply-siders ran up the debt (even compared to GDP) for 20 out of 20 years, while other Presidents, both Republicans and Democrats did not have this problem.

 

Debt Strategy

Why Supply Siders Like a rising Debt

Six keys to understanding supply-side debt strategy

  1. Eventually they want it to come down, but first they want it to go up.
  2. What they [#really care about:] ♦ Lower taxes, and ♦ Smaller government.
  3. Lower taxes cause rising debt (no, the [#voodoo] does not work).
  4. Rising debt causes pressure to cut spending and raise taxes.
  5. The Republicans pledge not to raise taxes, so spending must be cut.
  6. The Republicans block military cuts, so middle-class programs must be cut.
  • That's smaller government. And this is how supply siders use debt to "strangle" the American government.

The first year, under Reagan, it was an accident—the supply siders actually believed their own nonsense, but it soon became a plan. That's why it has gone on for 16 [now 20] years under Republicans. The national debt is aimed at Social Security, Medicare and other government programs for the middle class. If left unchecked it will kill them. So far the federal deficit has borrowed more than $1.6 trillion [now $2.5 T] from the Social Security Trust Fund, and Republicans are warning that it's going to be hard or impossible to pay it back.

Why? Because, with the national debt high and rising, taxes cut and tax increases blocked, repaying the debt to Social Security (and the workers and businesses who put their money into it) would require unacceptable borrowing or impossibly large cuts in military spending.


National Debt under Clinton

Clinton stopped the bleeding in just three years and then dropped the debt from 67% to 57% in his last five years. Bush wasted no time in reversing this progress and is now forecasting that he will achieve the highest ratio of debt to GDP in 50 years.

 


[#PopNotes]

[=really care about:] Dick Cheney summed it up: "Reagan proved that deficits don't matter." This is how he justified the huge tax cuts for the rich at the start of G. W. Bush's presidency. This shows that he knew the voodoo does would not  work and that tax cuts would turn budget surpluses in to deficits.
[=voodoo] The voodoo part of supply-side economics
is the claim that reducing tax rates cause rich people to pay more tax. Of course the rich like this theory a lot. The "idea" is that with lower tax rates, the rich will be inspired to work harder and this will make them so much richer that they will actually pay more taxes. Instead, the government just had borrow.
[=PopNotes] Just hover over green-underline links above to see the "pop" notes.

 

$12 Trillion Calc

zFacts-Reagan-Bush-National-Debt.gifFull-Sized Graph and Overview

This page provides the detailed calculation of the $12 Republican national debt. To see the full-sized graph and why this makes sense click back to $12 Trillion.

Complete Proof of the $12 Trillion Republican Debt

Just below you can see the calculation and the documentation links for the Reagan-Bushes $12 Trillion ($12,049 Billion) national debt as of September 30, 2010. You can download this as an excel spreadsheet by clicking: Download as XLS.

Their debt has 4 parts, but the bulk of it is calculated from 4 inputs (yellow and tan) that you can check with the color coded links to the treasury at the bottom. This will verify the $3.4 Trillion Reagan-Bush debt and the $6.1 Trillion G.W. Bush debt. Together that's $9.5 Trillion. Now some of G.W. Bush's debt is really interest on the Reagan-Bush debt, so he is not as bad as he looks, and Reagan-Bush are lot worse because of all their interest. You can see that in the graph above.

Interest is calculated on the second sheet (tab at bottom). But you know that 17 years of compound interest on 3.4 Trillion is going to add a lot. So a $12 Trillion total is very believable, and if you want to spend 10 minutes you can check it easily.

And if you think Congress did it, you better have a look here. Under Reagan and Bush-I, Congress actually made the debt a tiny bit smaller than what both presidents asked for. And G.W. Bush passed his supply-side tax cuts with a Republican Congress. There is just no wiggle room. The Republicans did it.


 

About the Graph

On the Graph above, the Reagan+Bush debt is the gap between the red line and Clinton's green line at the bottom. As it shows, if America had not had to pay the Reagan-Bush interest, Clinton's budget balancing would have nearly paid off the remaining debt from WWII--and we would have been in fabulous shape when the Great Recession struck.

Documentation

Here is the slide-by-slide documentation for The Supply-Side Story slide show.
(in progress Oct. 10)
2. The Supply-Side "Revolution"
3. How Not to Be Tricked: Everything's bigger, not just the debt.
7. G. W. Bush's promise
8. Debt Confusion Other web sites are still using misleading graphs.
9. $9.2 Trillion: Dowload spreadsheet: whose-national-debt.xlsxlnk.gif
10. The Problem The supply-sider's stealth agenda
11. What Fooled Reagan The Laffer-Curve "theory"
 
 

  2. The Supply-Side Revolution 
David Stockman, Reagan's first budget director, considered himself a leftist revolutionary when young, but then became a leading supply-side revolutionary a couple of years before Reagan was elected. In his book "Triumph of Politics," recounting the failure of the "Reagan revolution," he frequently refers to the supply-siders agenda as revolutionary -- for example, "The GOP rank and file's reservations about the Kemp-Roth tax cut really bothered me. That was the political gravy -- the easiest part of the revolution" (p.55).
During Reagan's campaign he tells us "Reagan had been converted to supply-side -- so for better or worse, Reagan now was the the voice of the revolution" (p. 50).
In the prologue however he tells us "In the final analysis, there has been no Reagan Revolution" (p. 15). In fact he realized this by the end of Reagan's first year in office. The problem was, that Stockman wanted the budget cut, and that did not happen. Instead only taxes were cut and this produced the huge deficits.
Stockman explains how this happened. "Jack Kemp liked the sound of their [the supply side gurus, Laffer and Wanniski] music on this issue. They were leading him, too, into a shriller and shriller anti-balanced-budget, the-tax-will-pay-for-itself, and deficits-don't-matter-that-much position" [emphasis added]
And here are some quotes by the press of the day:
"A few of the recently appointed sub-Cabinet officers will be on the cutting edge of the change Reagan has promised for the Federal Government. Their fervent beliefs are a radical departure from the policies of past Administrations, Democratic or Republican. Says one moderate White House aide: "The revolution is happening and nobody is noticing." --Time Magazine, Mar. 16, 1981.
President Reagan would not be proposing business as usual. The President had in mind what Stockman saw as "fiscal revolution." --The Atlantic, December 1981.
“Reagan Wins his Budget; the Revolution Begins” --Time Magazine headline, July 6, 1981
 
 

  4. Reagan's Promises
During his campaign Reagan promised to balance the budget by FY 1983, but on March, 2 1981, Time reports that Reagan changed that to FY 1984. Of course even his FY 1989 was still sending the debt through the roof.
 
 

  7. Bush's Promise Was Made More than Once
It will retire nearly $1 trillion in debt over the next four years. This will be the largest debt reduction ever achieved by any nation at any time. It achieves the maximum amount of debt reduction possible without payment of wasteful premiums. It will reduce the indebtedness of the United States, relative to our national income, to the lowest level since early in the 20th Century and to the lowest level of any of the largest industrial economies. --PRESIDENT'S BUDGET PLAN: "A BLUEPRINT FOR NEW BEGINNINGS"--February 28, 2001, President's Message To the Congress of the United States: www.ssa.gov/ history/ gwbushstmts.html
----------
Read Mr. Bush's speech when he presented his first budget in February 2001. He foresaw a $5.6 trillion surplus over 10 years and emphasized that much of that would go to paying down the debt.

''I hope you will join me to pay down $2 trillion in debt during the next 10 years,'' Mr. Bush said then, between his calls for tax cuts. ''That is more debt, repaid more quickly, than has ever been repaid by any nation at any time in history.'' His budget message that year promised that the U.S. would be ''on a glide path toward zero debt.'' --A Glide Path To Ruin, By NICHOLAS D. KRISTOF, June 26, 2005, New York Times.

 
 

  11. What Fooled Reagan: The Laffer Curve
"Jack Kemps bill would keep the income tax progressive by cutting substantially the income tax across the board in every bracket. People would have more of their money to spend as they wish and there would be more for investment to expand our industry. And government would reduce the deficit which causes inflation because the tax base would be broadened by increased prosperity." --Regan in his own Hand, p. 277

There are several mistakes here, but the one we are focussed on is the idea that cutting taxes would "reduce the deficit." This was a completely hypothetical idea put forward by Laffer, and was based on no empirical evidence. This is what George H. W. Bush called "voodoo economics," and so it proved.

Also note that the top rate was cut from 70% to 50% (and then later to 38.5% under Reagan), while the bottom rate was cut from 14% to 12%.

It is also wilding wrong to believe that deficits cause inflation, as G. W. Bush recently proved with the the largest deficit every and inflation hitting it's slowest since the great depression.

 

Adding Up the Debt

  The method for adding up the $12 T Republican debt, is simple. Just add up the dollars and don't make any fancy economic adjustments. Is that the right way? I have chosen this method because it's based on the Republican approach to debt and because it's simple. It seems fair that they should be judged by their own rules.

From Reagan's first speech as President: "A trillion dollars would be a stack of thousand-dollar bills 67 miles high. The interest on the public debt this year we know will be over $90 billion, and unless we change the proposed spending for the fiscal year beginning October 1st, ..."

Well he changed it all right, and when he left office the stack of $1000 bills was 191 miles high.

So what did Reagan tell us about calculating his debt? (1) Start on October 1, 1981, and (2) Don't forget the interest costs of the debt.

October 1, 1981 is the beginning of his first budget year (fiscal year). He's right. He is not responsible for Carter's last budget year that runs until Oct. 1. But Reagan is responsible for his own last budget year, which ran until Sept. 30 1989. That's eight years, which is right for two terms. Reagan was right and fair about this, and that's what the spreadsheet above does.

And, like he said, the interest on the debt matters. And since he and Bush-I left us $3.4 Trillion of extra debt when Bush-I's last budget year ended on Sept. 30, 1993, that debt started collecting interest, and it still is. Clinton, G.W. Bush and Obama are not responsible for that interest. So the spreadsheet actually over-states G.W. Bushes debt because quite a bit of that was interest on the Reagan-Bush-I debt. But shifting that responsibility to Reagan-Bush (as the graph shows) does not affect our total for Reagan and the Bushes.

G.W. Bush took control of the budget on Oct. 1, 2001, when the debt was $5.8 Trillion and his last budget year ended Oct. 1, 2009, with the debt at $11.9 Trillion. During that last year, Obama got a stimulus bill passed, but that's the only significant change he was able to make in federal spending. (You can see it subtracted above.) Spending the stimulus money was slow, so only $36 Billion ($0.036 Trillion) contributed to Bush's deficits. So instead of raising the debt $6.10 Trillion, he only raised it $6.06 Trillion.

About $0.2 Trillion is still left from WWII, and Obama has $1.25 Trillion that's his. Of course half of that is from the Bush-II tax cuts and most of the rest is because of the Great Recession.

US Debt Clocks

What's causing today's huge deficits? Deficit basics. Top 4 deficit causes.

US-national-debt-GDP More about this graph

Who Did It, and Why?

As the clocks below tell us, the debt it still out of control. But to see when and why this started, you might want to click the graph at the right and watch the YouTube debt video

We Are in Danger! ... but Not from the Debt

The danger is from the Great Recession that has cost America 10 million jobs. The debt frenzy is making that worse. Take a look (in the graph) at how the debt skyrocketed during World War II. That's how we [#ended 12 years of Great Depression]. This time it's tougher because Reagan and the Bushes ran the debt much higher in good times than it was at the start of WW II. But as Reagan understood, cutting government spending in a recession only makes it worse. Yes, we must pay down the debt, as Clinton was doing, but not while 17 million are out of work. ... more

Share


   
[#Debt or Savings]
In the last
# [#secs].
Borrowed by the [#General Fund] – $ #* $ #
Saved in Social Security Trust + $ error $ error
Saved by other Gov. Trust Funds + $ # $ error

Debt [#Owed to the Public] $ error $ error
*Gross National Debt  ♦  †Debt Held by the Public  ♦  Debt Clock Source Data



Some Debt Facts:

  • Social Security is $2.7 trillion in the black (Nov 2012). In 2010 it ran a $90 billion surplus.
  • Clinton reduced the debt as a percent of GDP.
  • G. W. Bush restarted the deficits with tax cuts tilted toward the rich, and then continued with Medicare D, two wars and more.
  • Red ink hit a peak rate of $1.1 trillion in 100 days just before Obama was elected.
  • Obama's stimulus was only $0.8 trillion. 
  • Only $1.2 trillion is owed to China (11/2012).[#1]

How Do the General Fund and the Trust Funds Get their Money?

The General Fund: All personal and corporate income tax.
Social Security Trust Fund: Payroll taxes on wages up to $113,700  (as of 1/2013).
Medicare:  Payroll taxes on all wages.

Thanks for all the "Likes" and "Shares" — a real help.

[#HoverNotes]

[=ended 12 years of Great Depression]No it was not the devastation of Europe that helped. This is a crazy story made up by Republicans. But (1) We pulled out as we started building the Pentagon, which was before Pearl Harbor, and before the devastation of Europe. (2) It was GM building military trucks and tanks, etc. that did it. Take a look.
[=General Fund] What is the General Fund?
It's the main federal government fund, and its big expense is the military. Then there are the trust funds (Highway, Social Security, etc.). On average the trust funds have extra money that they are loaning to the General Fund, so a lof of the debt is owed to the trust funds.
[=New App]

Get this graph with the voteFacts App

Click here: VoteFacts! to see it on your computer or mobile device. Fourteen graphs, simple explanations. Plus the most accurate election prediction anywhere, updated daily ... and more. Works on anything with a browser.
[=Debt or Savings] What Is "Total Debt or Savings"?
The national debt (total accumulated debt) is the sum of all the annual deficits less any surpluses. The "deficit" is one-year's shortfall. This shortfall must be made up by borrowing.
But the Social Security Trust Fund and other government trust funds are not in debt. They have trillions in savings and the General Fund (which has the total debt, borrows from them).
[=secs] What determines the speed of the clock?
Some days the debt actually goes down, and others it goes up extra fast. No one knows what it will do on any given day, so we just show it increasing at its average rate, because that's the best guess.
[=Owed to the Public] AKA Debt Held by the Public is the amount of Treasury Bills and Bonds that have been bought by American citizens and companies and by foreigners. The rest of the debt is owed by the General Fund to other government Trust Funds that have run a surplus. Note that since America mainly borrows from Americans, the debt is mostly owed to Americans.
[=1] From CNN July, 2011.
[=HoverNotes] Just hover over green-underline links above to see the "hover" notes.

Why we should price carbon. The solving the climate problem requires cooperation, and caps just cause bickering. A common global price is the only way change self interests and gain cooperation.

Share [=script src="http://static.ak.fbcdn.net/connect.php/js/FB.Share" type="text/javascript">[=/script>
National Debt
National Debt

Debt Data

Whose National-Debt Numbers?
The data plotted here were taken directly from the White House web site and plotted without modification. For details, see ([#Source]).

The gross national debt is reported (almost) daily by the U.S. Treasury at Debt to the Penny xlnk.gif Our clock is updated every weekday (see below) which makes it the most accurate on the web.*

What determines the speed of the clock?
Some days the debt actually goes down, and others it goes up extra fast. Since no one knows what it will do on any given day we just show it increasing at its average rate, because that's the best guess. But what average rate?

The Office of Management and Budget at the White House predicts the "Gross Federal Debt" for the next few years. At the end of the fiscal year 2005, (Sept. 30 2005) they list the debt at $8,031.4 billion. They predict it will be $676 billion higher at the end of the next fiscal year. That is the average rate of increase per year assumed by the clock.

For daily Debt Held by the Public xlnk.gif
For monthly Social Security Trust xlnk.gif
Fed. Use: Securities Held Outright xlnk.gif

 


Popnotes used above:

[=Source]What Is the Source of the Date in the Historic Graph?

The data is from the historical tables in the 2006 OMB Budget as downloaded from WhiteHouse.gov Historical Tables (Bush WH no longer available). The data are plotted without modification. Here is the relevant two page Table 7.1 in PDF format.

The data and graph are available in this Excel spreadsheet.

 

 

Video and Slides

This slide show explains why the Republican debt is $12 Trillion when calculated by the balanced-budget standard that Republicans prefer, but only $9.2 Trillion by economic standards. It aslo explains some about why the debt went out of control, and when debt is good and when it's bad.

  Click here  ^  for Next Slide. ^ for Full Screen


Here's a short version that only cover the economic approach, where the debt came from and the boom caused by the WWI debt.

  Click here  ^  for Next Slide. ^ for Full Screen


This video also uses the economic approach (not the Republican's balanced-budget approach) to calculating the Republican debt.



You may download and post these shows.

Presidents

f

Contributions of Presidents to the Gross Federal Debt

[ This is out of date ~2007. Things turned out much worse for Bush II. ]

The Presidential contributions to the gross federal debt are computed from data available from theWhite House.gov in the Historical Tables, Table 7.1 (PDF), p. 118, for FY 2005. The graph and data are also available in this XLS source file

For each term in office, the President is responsible for four fiscal year budgets starting Oct. 1 of the year they take office and ending Sept. 30, eight months after they leave office. Table 7.1 gives the gross federal debt as a % of GDP at the end of every fiscal year since 1940.  Each President's federal debt contribution was computed by simply subtracting the value at the start of his first FY from the value at the end of his last FY. 

All Presidents prior to Reagan contributed to paying off the huge WWII debt. The graph also credits the drop in federal debt as a percent of GDP under Clinton towards repayment of the remaining WWII debt and not towards paying off the Reagan-Bush debt. That would simply hide their impact by making it appear that more of the current federal debt was left over from WWII. Had Reagan-Bush simply managed to break even, the WWII debt would have been as low as it's shown to be.

Debt held by the Federal Reserve System is purchased by printing money; the purpose of these "open market operations" is to put more currency into circulation. The most recent figuresused for this part of the federal debt are available from the St. Louis Fed. This was divided by GDP figures provided by the Department of Commerce.  

Since all Presidents from Truman on have reduced the gross federal debt except Reagan and the Bushes, the part remaining from WWII is found by subtracting their debt contributions (and the FRS contribution) from the current federal debt total.

Keywords: Federal Debt, National Debt

 

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$12 Trillion

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Whose National Debt? . . Better Look Before You Vote
( Especially if you're under 30. )

Is our present debt from World War II, when it was the biggest ever?

Then our national debt shot up by (the equivalent of) $10.5 Trillion

That put millions to work, ended the Great Depression and
won World War II.

But look at how fast we paid it down, Republicans and Democrats alike,
to its low point in 1981. Then ...

 

... disaster struck.

 



Turn on Display-Images.


In 1981 Reagan's supply siders said they would fix the debt, but look above! They wrecked decades of progress in just a few years.

 


So they're still blaming Congress. But ...


Turn on Display-Images.


Congressional budgets averaged $2B Less than Reagan asked for.
So you can't blame any of the $3,414 Billion ($3.4T) debt on Congress.

 


But don't we have to pay interest on that supply-side debt?
You bet.



Turn on Display-Images.


Almost too amazing to believe!
$12 Trillion of our $13.5T debt is Republican.

But 17 years of compound interest on top of $3.4T comes to $8.2 Trillion.

Without that interest, Clinton would have almost paid off the WWII debt!

The supply-siders are back with the Republican Pledge.

They've made the debt worse 20 out of 20 years (Reagan & 2 Bushes).
Fool me once, shame on you. Fool me 20 times, ...

Don't Vote for Supply Siders if You Care about Our Future!

Please Pass This On to at Least One More Voter
( ... and one person who will keep it going. It's worth thinking about this.
You could start a chain letter that would reach a million! )

-- Thanks so much for helping!

P.S. If you need to start a fresh copy, (are the pictures missing?) it's easy to get one
here: zfacts.com/p/1180.html

And there's much more info and full documentation here: zfacts.com/node/108

 

YouTube e-Mail

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This message will be sent below yours:



Stop the Lies . . Stop the Voodoo !

See this YouTube video: www.youtube.com/watch?v=P1bZ-TiX8rA

It started with a lie: The national debt was the highest ever!
Not True . . . It was its lowest compared to our income in 50 years.

- - - Why did they lie?
- - - What did they do when they took power for 12 years?
- - - - - - and again later for 8 more?
- - - Why are they still lying about Congress?
- - - What do we have to show for $9.2 trillion?
- - - Can they be stopped?

- - - What did our most heroic patriots show us that can save us now?

 



Click to See the Video
Turn on Display-Images to See 1st Screen. Or Click to See Video.

Please Pass This On to at Least One More Voter

( ... and one person who will keep it going -- someone who passes emails to you?
You could start a chain letter that would reach a million! )


Thanks so much for helping!

P.S. If you need to start a fresh copy, (is the picture missing?) it's easy to get one
here: zfacts.com/node/109