Debt Under Obama Increasing Faster Than Under Bush
The debt has increased at a faster rate in the past three years than in the previous eight, but assigning blame isn't what matters.
Several conservative bloggers picked up very quickly a report from CBS Radio’s White House Correspondent Mark Knoller noting that the National Debt has increased more under President Obama than it did under President Bush:
The National Debt has now increased more during President Obama’s three years and two months in office than it did during 8 years of the George W. Bush presidency.
The Debt rose $4.899 trillion during the two terms of the Bush presidency. It has now gone up $4.939 trillion since President Obama took office.
The latest posting from the Bureau of Public Debt at the Treasury Department shows the National Debt now stands at $15.566 trillion. It was $10.626 trillion on President Bush’s last day in office, which coincided with President Obama’s first day.
The National Debt also now exceeds 100% of the nation’s Gross Domestic Product, the total value of goods and services.
Knoller’s numbers are absolutely correct, and you can check them yourself at the Treasury Department’s Debt To The Penny Calculator if there are any doubts. However, Blue Texan at Crooks & Liars accuses Knoller of misrepresenting facts:
What Knoller doesn’t specify, naturally, is what the debt was when Bush began his presidency. And that’s a glaring omission, because unless you don’t know that, you can’t accurately compare the records. So here it is.
In 2001, the national debt Bush inherited was around $5.7T, give or take. Some of that debt in 2001 has to be attributed to Clinton, just as some of the debt in 2009 when Obama took office has to be attributed to Bush. When W. left office in 2009, the debt was nearly $11T. That’s an increase of 89%.
Under Obama, the debt has increased from about $11T to about $15T, about 40%.
They’re both correct, of course. Knoller’s article focuses on the raw numbers of the National Debt and, if you look at it that way, then it is indeed true that the gross Federal Debt has increased more in raw numbers in the first three years of the Obama Administration than it did during all eight years of the Bush Administration. Blue Texan is also correct, though, to note that the $4 trillion-odd increase from 2001 to 2009 constitutes a larger share of what the debate was in 2001 than the raw increase from 2009 to today does of what the debt was when President Obama took office. That’s an important perspective to keep in mind because it provides context to the numbers.
However, there’s yet another way to look at this.
During the eight years that President Bush was in office, the National Debt increased at the approximate annual rate of $612,375,000,000 per year ($4.899 trillion/8 years). During the time that President Obama has been in office, it has increased at the approximate annual rate of $1,533,850,931,677 per year ($4.939 trillion/3.22 years). So, the rate of increase under President Obama over the past three years has been more than twice what it was for the whole of the Bush Administration.
So, yes Blue Texan, the point you made is correct but it’s incomplete, and attacking Knoller for pointing out a simple fact was uncalled for.
But that doesn’t mean one President is worse than the other when it comes to this issue. In reality, they are both guilty of fiddling while Rome burns and, to the extent that the deficit has increased over the past three years it is due in no small part to the fact that the President has followed many of the same failed fiscal policies as his predecessor. In fact, I’m not even sure it’s worthwhile to sit around and assign blame unless one is just interested in scoring partisan talking points, which is a game I don’t care to play. We’ve now reached a point where the deficit is increasing at an unsustainable rate and, instead of playing political games with the tax code, it’s time to start getting serious. Unfortunately, I don’t think there’s anyone in Washington who’s really up to the task.
That’s not what this data is showing:
Per Capita Government Spending by President
Oh wait, I get it. Under the accounting above Obama gets the penalty for all past Republican tax cuts!
That’s just evil.
Both presidents have demonstrated failed leadership when it comes to the debt. And, neither Congress nor the American people have done their jobs in holding either President accountable for spending. At some point, we just have to say no.
Unfortunately, too many in the media (Paul Krugman I’m looking at you) actually have scoffed at even worrying about the debt.
http://www.chron.com/opinion/outlook/article/Krugman-Debt-matters-but-not-that-much-2437271.php
@Dean:
Bush didn’t care, and Obama punted. Neither were stellar actors.
But the drama surrounding the Simpson-Boles budget plan. No one in Washington backed the thing, but even worse they all circled each other, waiting for someone to endorse it, so that they could pounce.
Real budgets are hard, attacking anyone standing near a real budget is easy. It’s very sad, but that’s where we were .. and where we still are today as phony “campaign plans” are unfurled.
Can’s 9-9-9 being the exemplar.
Should be “But the drama surrounding the Simpson-Boles budget plan illustrates the dynamic” above.
The deficit has been pronounced “unsustainable” for over thirty years now with dire consequences just around the corner. Uncontrollable rises in interest rates, massive inflation and “crowding out” of the private sector are prognosticated on a semi-annual basis yet never materializing. At some point one would think it merits re-thinking what the national debt actually is and how it interacts with the private sector.
I don’t think it’s correct to insinuate there’s nobody in D.C. up to the task of reigning in the debt.
Give McConnell 60 solid votes and give Boehner and Paul Ryan a dozen or so more seats with which to work, and Romney as president in a 2nd term and thus not worried about reelection, and I think you’d be quite surprised at the progress that could be made. Hell, even in a 1st term for Romney if you had a lot more of the likes of Kyl, Lee, Rubio, Crapo, Inhofe and Ron Johnson, and far less of the likes of Reid, Franken, Stabenow, Kerry, Murray, Boxer, Cardin and Durbin, you’d be able to make some material progress.
Getting rid of Bernanke also would help.
The financial crisis is the gift that keeps on giving.
Its seems obvious that the compounding nature of debt will leader to ever-growing deficits and levels of debt under each successive President. Add to that the gov’t stimulus that most people will agree was necessary to stave off financial disaster and its not exactly shocking that there are record-setting deficits and debt under Obama. The two questions I have are how can we reverse it and when will we reach the tipping point where it becomes too late?
@Tsar Nicholas: That’s rank partisanship, even for you. The Republicans haven’t submitted a single plan which doesn’t increase federal debt, even when they controlled both Congress and the White House.
@J-Dub: Compound interest isn’t a factor in the public debt. Government pays a fixed amount based on the yield when the bond is sold. The amount owed does not grow in any sense as it might on a credit card.
Happy to be of help…
Oh please, I see the usual suspect is peddling more fantasies…as if Republicans all by themselves have ever shown any progress in reducing the debt…
“attacking Knoller for pointing out a simple fact was uncalled for.”
What’s uncalled for is any discussion of the debt which leaves out the simple fact that we’ve spent all of Obama’s time in office dealing with the worse financial and economic crisis since the Great Depression. You don’t worry about your mortgage payment when the house is on fire. That’s what Knoller is doing and that’s why he deserves every ounce of scorn and ridicule he gets over that idiotic report.
Mike
@MBunge: Say it agin’! When the House gets serious about getting Americans back to work, I’ll start to take seriously any worry about our debt..
doug:
No, not really. Blue Texan didn’t mention one large problem with what Knoller did, and neither did you. CBS has pulled this stunt before, and so have you, and I called you on it, so you should know better.
What CBS did is exactly what Cato Institute was talking about when they said this: “Don’t Blame Obama for Bush’s 2009 Deficit.”
In FY03, GWB set a new record for biggest deficit ever, and then he broke his own record in FY04, and then he broke his own record again in FY08. And then in FY09 he set a new record that was triple his previous record.
The deficit for FY09 ($1.4T) is a huge number, much larger than any prior deficit, and larger than all but one of the actual or estimated Obama deficits. Because that number is so big, shifting it from Bush to Obama makes a big difference in the analysis. That unfair shift is done routinely by all sorts of right-wing hacks. It’s disappointing to see CBS doing the same thing.
By the way, Glenn Kessler of WP also did essentially the same thing (link). That darn liberal media.
This is the stupidest discussion ever. When Bush came into office. he was handed a balanced budget.
What happened? Grover Norquist.
I repeat, shoot all the Conservatives, let God sort them out. ( Vietnam, for those who don’t get the reference.)
Ozark,
If you really believe the budget was balanced when Bush took office I have a bridge in Brooklyn you might be interested in. The number of accounting tricks, off budget items, and outright chicanery that was involved in calling the Clinton-Gingrich budgets “balanced” is really quite amazing.
@OzarkHillbilly: Actually, I think the guy from Vietnam era was quoting (actually paraphrasing) Suliman the great; who, if I am right said
“Kill them all, Allah will know his own,”
Among other tricks that Doug was noting above was that the government was spending the Social Security surpluses, but not including those outlays in the budget numbers, IIRC.
We know why deficits are growing faster now — the great recession depressed the tax base and revenues are down, and the only “stimulus” the parties can agree on is temporary tax cuts, which further reduce revenues. Government spending, per se, is not growing at an outrageous rate and the only increased government revenues relate to the recession — unemployment benefits and the first stimulus. In fact, in general the federal government has been gradually shedding employees.
So overall, sure, the debt is growing faster and deficits are larger, all thanks to the recession. It is hoped that the economy will return to a normal level of employment some day, and when it does the revenue situation will improve (and the end of the temporary tax-cut stimulus will also help the revenue situation).
So, a little context for these numbers is nice to have. Just saying, “the deficit is growing faster!” without the reason why will create a false impression. If the economy were anywhere near a normal state, the Obama administration would almost certainly be shrinking the deficit, not growing it.
@Doug Mataconis:
How does the Clinton era stand out in my chart, Doug?
The weird truth is that a Republican congress would not spend for Clinton but went nuts for Bush. Just as a Republican congress will not spend for Obama now. They just continue Bush spending (wars, Medicare part d), but won’t tax either.
@Ben Wolf:
I remember when the progressives hated budget deficit but that was when Bush was President. Now that progressives have control of the spending, progressives have no problem with deficits.
Of course, two speculative bubbles, the lack of good investment opprotunities, and facing long term unemployment well above the norm had nothing to do with budget deficits.
I guess entitlement spending can grow faster than the economy grows forever.
@An Interested Party:
If you are going to follow the Clinton model, then the Democrats should start no new govenrment programs, no new regulatory schemes, should be cutting defense spending, and should promote and unsustainable speculative bubble.
@superdestroyer:
Please, “progressives” or anyone else with a brain could tell you that you don’t cut taxes when things are good and your paying down debt. Doug is right that Clinton didn’t balance the budget (but he has come the closest anyone else has since since the 1980’s) , but you can hardly call raiding SS revenue to paper over the budget is “Clinton’s” trick (among a few other things). The point is we are never going to come to a broad consensus on the best level of government involvement, but the kind of tax spending Bush and Reagen did during times that were relatively good, was not consistent with anything other then exploding the debt. it’s fine to cut taxes, especially when there is a financial down turn, but you have to pay that money back sooner or later because you are making divestment already agreed upon spending.
Right now ware are in it deep financially so it makes sense to step up expenditures to make the first baby steps towards paying back what we owe. There are a lot of people hurting, there is a much smaller number making out like bandits. The notion that allowing tax rate to start getting back to where they were, for some at least, in order to take the first tiny steps to paying back the bill we rang up is akin to socialism or anything like it is joke.
Personally, I think trying to run monetary policy via the tax code is nuts, but right now it’s the only compromise that can be made.
I’m sorry, Doug. This “both sides are wrong” take does a disservice to your readers.
As any fair-minded reader can see, the whole point of Knoller’s piece is to blame Obama for the record debt — and to say, “look how much money Obama’s wasting.” He’s done it before. And both points are outright falsehoods.
The thing about debt, as anyone with credit cards bills can attest, is its much easier to get from $11 to $14T than from $5 to $10T, because of payments on interest.
Moreover, does anyone think paying down the debt that doubled under Bush was going to happen during the worst economic downturn since the Great Depression—coupled with historically-low taxes? Of course not.
And two points your readers brought up (which Knoller doesn’t mention): spending under Obama has been moderate and part of the 2009 debt is Bush’s.
Without all that context, Knoller’s article is drivel.
Here’s where I come to ask my layman’s question:
If we have a budget deficit each year, adding to the overall debt…don’t we have to have budget surpluses every year for a long time, to not only have no deficit for each given year, but take in more money than we spend in order to pay down the debt?
I don’t think that will fly with the Republic Party…I mean they claim to hate taxes, so they minute they see more taxes levied than actually “needed” at the time, won’t they clamor for a tax prefund to the people? Or lowered tax rates for the next year?
I think that with $15 trillion in debt, it’s gonna take years and years and years to cut spending and raise revenue enough to pay it off, assuming there’s a way to do that and not just reduce the rate of adding to the debt.
And spending cuts alone aren’t likely to do it.
Or do I misunderstand something about the fiscal state of the nation and the way tax politics works?
I’m not even into Modern Monetary theory and Ben Wolf still gave the best comments. The deficits are fixable long term we just need politicians that recognize spending over 700 billion dollars a year on defense/wars is unsustainable and crazy. If you have to cut anything why not cut guns before butter? Also, if we could somehow force other countries currencies to appreciate against the dollar we could finally start to lower the trade deficit and increase employment which also deals with the federal fiscal deficits.
“If we have a budget deficit each year, adding to the overall debt…don’t we have to have budget surpluses every year for a long time, to not only have no deficit for each given year, but take in more money than we spend in order to pay down the debt?”
The point is not about paying down the debt. The point is that debt requires you to service that debt and pay the interest on it. If you have a debt that is something like 30% or 50% of your GDP you are not going to spend much money doing that. The problem with high debt to GDP ratios is that it requires a LOT of money to service the debt. You must then have a high tax rates to pay the interest on it, while not managing to offer public expenditures on the same level.
The point should be to have a sustainable deficit, not paying down the debt. Obama and Bush makes Reagan and Lyndon Johnson looks like Uncle Scrooge.
@Ben @Ben Wolf: Sure, but when you never pay down the principal and continue to refinance it plus the accumulated interest, doesn’t that have a compounding effect?
@J-Dub: The principle on Treasuries is always paid back. Let’s say you buy a $ 10,000 ten-year Treasury Note at 2.00% yield. Your bank takes money from your account and dispatches its own bank reserves to the government’s account at the Fed, and in return the Treasury is transferred to your bank. $10,000 at 2.00% is $200, which the Department of Treasury will pay you upon maturity. This sort of thing happens continually because bonds are maturing all the time. In ten years (unless you sell the bond to someone else on the secondary market before) the bond will mature and can be redeemed. The government then transfers the bank’s reserves back to your bank and swaps them for the bond it originally sold you. All that’s really happening is an asset swap, reserves (money government provides to the banks) for bonds (which are also an internationally recognized form of money.)
The government’s total liability is the $200 dollars it promised when you bought the bond. It always has sufficient reserves to redeem outstanding Treasuries and is never stuck finding a way to pay them back. That’s why bond yields are so low; the transaction is (unless the country collapses) risk-free.
As an aside I really have to wonder about the mental state of people who hit the dislike button on my earlier comment that the government pays a fixed rate on bonds. How do you dislike a fact?
re:
Again, from a layman’s point of view, that’s not the message I hear at all in the various political arenas. It’s always about eliminating the debt and deficit, and how the government should be run like a business…spend less than you take in, being responsible with the money.
And if you look at the debt in relation to GDP, the debt is growing, and outside of inflationary effects, is guaranteed to grow if it’s not paid down….whereas the GDP is not guaranteed to grow, as we have seen.
Can one count on ratios to ease stress about the debt, when one just can’t count on the numerator (or the denominator?) being predictable?
Monetary policy for the government just is not the same as a business it seems, yet that’s not the message I hear from the Republic Party…not at all.
@Ben Wolf: Heh, I’m always amused at what gets ‘unhelpful’ votes around here. In this case, people are attacking the messenger, not the message.
@Doug Mataconis:
Whatever you think Doug the record shows that the Clinton budget was balanced. And only you could think budget chicanery was unique to Clinton.
@Just ‘nutha ig’rant cracker: I’ve read the comment as being attributed to someone during the Albigensian crusades, who, upon being informed that both “good Christian” and heretics were in a town that they were about to attack, retorted:”kill them all, God will recognize His own.”
@J-Dub: J-Dub Most people would not agree the Stimulus was necessary, Most people think it did not work and we tossed a lot of tax payer money down the drain. Lets look at the last Recession from the Dot.com bust : W inherited a recession, the economy was going down hill, GDP and federal revenues were dropping and instead of spending tax payer money he let people and business keep more of their money. It was the fastest USA recession turn around recorded. Add in 911, the war against the Taliban, the unfinished war in Iraq and katrina to cause havoc with the economy and we still had record revenues and statistically full employment till the DNC took over Congress. This all by a President who I would consider mediocre.
And Debt doesn’t have a compounding nature, over spending does. Most people have some form of debt in their budgets and realize you can not continually spend more money than you take in.
To answer your last two questions. We can reverse it by demanding that the people we elect reduce spending and government interference to only what is specifically mandated by the Constitution.
I would hope that we manage to answer the first question as soon as possible so we don’t face the consequences of the second.