By Bill Wichert, PolitiFact
The debt held by the public refers to money borrowed from investors outside of the federal government. The total debt represents debt held by the public as well as money the federal government owes itself, including for programs such as Social Security and Medicare.
On Jan. 20, 2009, the date of Obama’s inauguration, the debt held by the public — as accrued by Obama’s predecessors — stood at roughly $6.307 trillion and the total debt was about $10.6 trillion, according to the U.S. Department of the Treasury’s “Debt to the Penny” calculator.
By April 27, 2012, the debt held by the public was about $10.8 trillion and total debt had climbed to roughly $15.6 trillion.
So, that means that in the less-than-three-years under Obama’s watch, debt held by the public had increased by about $4.5 trillion, or roughly 72 percent. Total debt had increased by nearly $5 trillion, or about 47 percent.
The amount of debt held by the public that was added during Obama’s tenure would be about $6.329 trillion, surpassing the amount as of his inauguration by about $22 billion.
The national debt just keeps increasing.
By January 2009, the United States had accumulated $10.6 trillion in debt. That’s the net amount the country had borrowed from Washington through the Bush years.
The gross national debt now stands at $19.7 trillion (as of October 2016). That’s an increase of $9.1 trillion — not quite a doubling, but pretty close.
Keep in mind that Obama didn’t take any financial steps without Congress’ approval. And Republicans controlled the House for six years of his term and the Senate for two years.
Trump goes silent on national debt while racking up $1 trillion in 14 months – The Washington Times
It’s a major reversal for a president who during the campaign had said given eight years he could eliminate the debt entirely, but is instead looking at setting records for red ink.
“We are in for a rude awakening,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.
Her organization calculated that with December’s tax cuts and January’s budget-busting spending deal, Mr. Trump has already signed legislation that will add at least $2.4 trillion to the debt in the next decade and, should Congress make those policies permanent, could add as much as $6 trillion.
At that rate, the government will be paying $1 trillion a year in interest payments alone.
Mr. Trump at this time last year was crowing over the debt, which stood at $19.947 trillion and quickly dipped after his inauguration. He took to Twitter to demand credit.
“The media has not reported that the National Debt in my first month went down by $12 billion vs a $200 billion increase in Obama first mo.,” he wrote.
What the president will have to answer for, she and other analysts said, is December’s tax cuts and January’s budget deal, which will combine for a hole trillions of dollars deeper than it would have been otherwise.
Brian Riedl, a senior fellow at the Manhattan Institute for Policy Research, said the tax and spending bills will add about $3 trillion to the debt, in addition to $10 trillion already baked in from previous government spending patterns.
Copyright © 2018 The Washington Times, LLC.
Drowning in Debt By Shawn Tully, Fortune
The best-case scenario for the next few years is that America becomes a much riskier place to do business. A high debt load will limit our flexibility to keep the economy on an even course. “Countries with high debt don’t respond aggressively to downturns,” says Harvard economist Kenneth Rogoff. If the U.S. slips into recession, we’ll lack the option of lowering taxes or increasing spending on infrastructure, for example, as tools to revive growth. And as the debt load grows, efforts by the Federal Reserve to stimulate the economy with lower rates would be more likely to feed runaway inflation. “Then, investors will dump Treasuries,” says John Cochrane, an economist at the Hoover Institution. “That will drive rates far higher, and make the budget picture even worse.”
Trump has championed, and Congress has enacted, two laws that go in the opposite direction of fiscal reform.
According to Congress’s Joint Committee on Taxation, the Tax Cuts act, signed in December, will decrease expected revenues by a total of $1 trillion over the next 10 years, an average of $100 billion annually, even after any boost to growth and incomes from lower taxes. That number assumes that most of the personal income-tax reductions expire in eight years, and a break for expensing capital equipment starts phasing out in 2023. “Those breaks are extremely likely to be renewed,” says Brian Riedl of the conservative Manhattan Institute—and in that more likely scenario, he projects, the tax plan will lower revenues by $160 billion over the following decade.
The February federal budget deal, meanwhile, hikes outlays in both of the two categories of “discretionary” spending, defense and federal programs from foreign aid to housing subsidies, by an unprecedented 12%, or $150 billion a year in 2018 and 2019. It essentially obliterates bipartisan spending caps established in the Budget Control Act of 2011 that had kept recent deficits partially in check. These spending increases are so popular on both sides of the congressional aisle that they’re almost certain to establish a new floor for discretionary spending, from which future expenditures will rise.
All told, the tax cuts and increased spending will raise deficits by roughly $375 billion annually, by Riedl’s estimates, including additional interest.
Last June, the Congressional Budget Office (CBO) forecast that deficits would reach $1 trillion in 2022. Because of the new laws, America will exceed the $1 trillion mark much earlier, in 2019, assuming current tax and spending policies are extended, according to the nonpartisan Committee for a Responsible Federal Budget (CRFB). Those probable shortfalls will keep ballooning even if the economy thrives. Under the CBO’s forecast, deficits would have reached roughly $1.6 trillion in 2028 without the new laws. Now, the CRFB predicts a shortfall of $2.4 trillion. Largely owing to the deficit-widening measures, the U.S. in a decade will borrow $1 in every $3 it spends, vs. $1 in $4 if outlays and revenues had remained on their prior path.
In the past, spending that modernized highways and mass-transit systems or enhanced higher education has boosted the productivity of America’s workers. That raises incomes, boosts savings rates, lifts consumer spending, and swells savings that fund private investment. The interest burden generated by the mushrooming debt threatens to turn this virtuous cycle into an unaffordable luxury.
Policymakers are showing no willingness to take the unpopular, potentially radical steps needed to restore America’s fiscal balance. A sign of just how far Congress has shifted away from fiscal caution is the Senate vote on Feb. 9 to raise discretionary spending: Opposition from Republican budget hawks such as Rand Paul of Kentucky and Mike Lee of Utah was overwhelmed by the 34 GOP Senators who joined 36 Democrats in the upper chamber to pass the deficit-swelling measure. Nor is Trump likely to fill the fiscal-responsibility vacuum: The President failed to even mention fiscal “deficits” or “debt” a single time in his 5,866-word State of the Union Address.
Perhaps more to the point: Even if GDP did wax at the 3% level that the Trump team seeks, the extra juice would lower total debt by only 10%, or $3 trillion, by 2028, according to the CRFB.
Prior to the Trump tax cuts, the CBO was projecting that federal tax revenues would grow robustly, from 17.7% of GDP in 2018 to around 18.4% a decade later. But because of the cuts, revenues in 2018 are projected to be just 17.2% of national income. Government spending, meanwhile, was set to expand from 20.5% of GDP in 2018 to 23.6% in 2027 (the CBO did not project the figure after that date). But the February deal will trigger a huge jump in discretionary spending starting in 2019, raising the overall 2027 figure to 24.8% of GDP.
Our fiscal plight is becoming so desperate that America may soon find itself embracing solutions it never before contemplated.
Government spending has ratcheted up anyway—now with the blessing of the Republican legislative majority and a populist President.
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