Comparing Presidents, The National Debt

This post looks at national debt by presidency. (Long time readers may recall I did this once before, back in the day before I figured out how to put graphs up on blogger.)

Data on debt comes from OMB Table White House OMB Table 7.1 – the figure used was debt held by the public. Where the debt was made “real” and “per capita”, inflation was calculated from CPI figures and population came from BEA NIPA Table 7.1. CPI figures used were average for the fiscal year, and population figures were for the quarter the fiscal year ended. (Note that the fiscal year ended in June until 1976, and in September thereafter.)

Here’s real debt per capita…

Here’s debt as a percentage of GDP.

A couple summary tables…

So, what do we see… In terms of real debt per capita, Clinton was the big debt decreaser, distantly followed by Ike, himself distantly followed by Nixon/Ford and Carter and JFK/LBJ. Bringing up the shameful rear, the only 3 Presidents to increase the size of real debt per person were GW, GHW, and St. Ronald the Reagan.

When it came to cutting debt as a percentage of GDP, Clinton came first, followed by JFK/LBJ, Ike, Nixon/Ford and Carter. (JFK/LBJ did better by this count because real GDP per capita grew so quickly in that period.) Once again, GW, GHW, and especially St. Ronald the Reagan were the three fiscally irresponsible presidents, being the only ones who increased the size of the debt.

Is debt a bad thing? Well… it depends… driving up the national debt is like driving up a person’s debt – its fine if its a temporary thing, and it leads to greater growth. (E.g., borrowing to go to school can be fiscally responsible if it will lead to a high paying career.) But unfortunately, it does not appear that this has been the case for Reagan, GHW and GW.

Some will also protest that the President is merely a bystander when it comes to debt, and Congress is the culprit. Its true that Congress is an enabler, but the President submits the budget. Besides… take a look at the graphs… do the patterns seem to change when Congress changes, or when the President changes?

And one more thing… Presidents talk about their effect on the debt. The very first item on the list of Major Policy Initiatives on GW’s Economic Blueprint (released February 28, 2001) was Pay Down the Federal Debt. In fact, it has this nifty graph…

And we are told this:

Indeed, the President’s Budget pays down the debt so aggressively that it runs into an unusual problem—its annual surpluses begin to outstrip the amount of maturing debt starting in 2007. This means that the United States will be effectively unable to retire any more debt than what is assumed in the Administration’s Budget over the next 10 years—the President achieves “maximum possible debt retirement” in his budget.

And now an editorial comment / daily installment of Bush Derangement Syndrome… can GW’s failures on the debt be excused by 9/11, the Wars in Iraq and Afghanistan, and the end of the tech bubble? I don’t think so… JFK/LBJ inherited a recession and fought a war – it was also fought in an undeveloped country, but not only did they have to contend with insurgents, they had to contend with a regular army, and both were trained and supplied by a super power. Nixon fought the same war, and had to contend with an oil embargo at the same time. Both managed to cut the debt, and JFK/LBJ produced far, far more impressive growth in real GDP per capita to boot.

Next post in the series… interest on the debt…