Reader T-Bone sends a link to this article:
President Bush and the current administration have borrowed more money from foreign governments and banks than the previous 42 presidents combined, a group of conservative to moderate Democrats said Friday.
Blue Dog Coalition, which describes itself as a group “focused on fiscal responsibility,” called the administration’s borrowing practices “astounding.”
According to the Treasury Department, from 1776-2000, the first 224 years of U.S. history, 42 U.S. presidents borrowed a combined $1.01 trillion from foreign governments and financial institutions, but in the past four years alone, the Bush administration borrowed $1.05 trillion.
Cactus interjecting… It sounds ludicrous, even taking into account the fact that the figures are nominal rather than real. So I did a bit of checking… from the Treasury site, we learn that in August 2007, total foreign borrowing equaled 2.2 trillion give or take a few pennies.
We can get the same figure for December of 2000, the last full month before our Bush took office, at another location on the Treasury’s site: 1.015 trillion.
So yeah, the nominal debt more than doubled. What about real debt? Well, the BLS has a nifty inflation calculator and it tells me that 1.015 trillion in 2000 was equal to 1.23 trillion in 2007. Inflation adjusted, the statement in the article is not quite right. But its not that far off either, and the Bush still has another year in office. So far, our Bush has spent up a storm. (To which one can only say: “Damn Bill Clinton. Damn Nancy Pelosi. Damn George Soros.”)
Back to T-bone…
Does this mean anything in particular in regards to the value of the dollar?
As I understand it, borrowing from Americans means US dollars are borrowed and spent by the government rather than being invested (most likely) or spent (least likely) by the individuals. So I don’t think that affects the dollar’s value.
But does borrowing foreign affect the dollar’s value? Could this be part of why the dollar has dropped so dramatically during this administration?