“It is incumbent on every generation to pay its own debts as it goes.” – Thomas Jefferson
With the debt ceiling to be reached before the end of the year, and the looming “fiscal cliff” starting 1 January 2013, I thought it would be interesting to review our country’s public debt history and how we got to where we are (does not include unfunded liabilities which are considered “off book” debt).
Figure 1 below shows the debt in trillions of dollars accumulated by recent presidents during the term of their office as well as control of congress (note: the first year of a president’s term in office is generally based on the FY budget from the previous administration). As shown, prior to Ronald Reagan, all 39 presidents in the previous 190 years accumulated $990 billion in debt. Starting with Reagan, our debt steadily increased through G.H. Bush and Bill Clinton’s first term, trends up slower a bit during Clinton’s 2nd term, and then starts accelerating under G.W. Bush, and further accelerates under President Obama. In no year did our debt go down, no matter what they tell you about President Clinton’s or Newt Gingrich’s surpluses which never translated into any debt reduction for We the People (they just borrowed more from social security to create the illusion of a surplus and the media went along).
Figure 2 below shows the total debt accumulated by recent presidents according to the U.S. Treasury’s/OMB’s debt calculator. Percentages in parentheses indicate share of the projected 2016 debt of $20.8T.
As shown, all 39 presidents’ prior to Ronald Reagan accumulated $990 billion, or 4.3% of the total debt of $20.8T projected. Three presidents, Reagan, Bush I, and Clinton together added $4.8T to the debt in the next 20 years (23% of total). In eight years, G.W. Bush accumulated $4.9 trillion of debt or 24% of the 2016 projected total. In his eight years, President Obama will add another $10.2 trillion in debt or 49% of the debt total.
When President Obama took office in January 2009 the deficit was $10.6 trillion, and is currently forecast to reach $20.8 trillion at the end of his second term. As such, he will have added $10.2 trillion, or 49% to our 2016 projected debt.
President Bush II averaged deficits of $613 billion per year during his presidency, about triple his predecessor. President Obama is projected to average deficits of $1.3 trillion per year through his eight year term, or about double his predecessor. In two presidents, in a short sixteen years, our total debt will go from $5.7 trillion at the end of 2000 to $20.8 trillion ending 2016.
A simple six sigma root cause analysis: We, our President’s and our Congress’s, have a spending problem.
Two presidents, $15.1 trillion dollars in debt. This is not a matter of left vs. right. This is a matter of right vs. wrong, our children deserve better.
“The plans differ; the planners are all alike” — Frederic Bastiat