Extrapolated September 2010 Debt, by President
by Mike Kimel
Extrapolated September 2010 Debt, by President
Cross-posted at the Presimetrics blog.
This one is quick and dirty because I’m very low on time…. Anyhow, these days there’s a lot of talk about the debt, and some talk about how irresponsible Obama is, or maybe its GW. Who knows, there’s a lotta talk and very little hard facts, much less context. So, from working on Presimetrics, I had some debt data lying around and started with that.
The table below shows the total national debt and ending national debt for each President for December of the year before he took office and the growth rate over that time period. For grins I threw in the President’s extrapolated September 2010 debt. That was computed by taking the debt in December (in September 2010 dollars) of each President’s last year in office, and, assuming the rate at which debt had increased during his term would continue all the way to September 2010.
All data is in September 2010 dollars.
To interpret:
In December 1980, a month before Reagan took office, the debt was 2.354 trillion (Sept 2010 dollars). A month before he left office, in December 1988, that debt had increased to 4.866 trillion, which is an annualized growth rate of 9.50% a year. Starting with 4.866 trillion in December of 1988, and increasing at a rate of 9.50% a year would give you 35 trillion and change by September of 2010.
A few things to note… the two Presidents who added to the debt at the quickest rate were GW in first place and Reagan in second. They were followed by Ford, and then Obama, with GHW Bush not far behind. Now, I’ve been pretty critical of Obama for continuing GW’s policies (see Presimetrics, the book I wrote with Michael Kanell, and this) but all in all, as lousy as he’s been, he’s far, far from the worst perpetrator when it comes to fiscal irresponsibility. (And please, spare me the whole “the banks needed saving” when so did many businesses and households… which weren’t saved. I’d be less inclined to carp if the money was spent on keeping Main Street afloat rather than seeing so much flow to Wall Street.) I wonder how the Tea Partiers would react to that information, and whether they are are angrier at GW and Reagan than they are at Obama. Somehow I doubt it.
Note – the data, data sources, and analysis used in this post are available here.
Thanks for work. What I see missing however, is the role the the “baby boomers” have been playing in tearing down of the social fabric in the country. Am I incorrect to think that they have been the prime actors here? Of course, your “somehow I doubt it” is pretty clear, so I guess it holds true to my “Q”.
This chart really needs annualized inflation rate added to it. Because it looks like the way to DECREASE the debt is to have a bout of high inflation.
This assertion doesn’t line up with my recollection of history. Gerald Ford expanded the deficit almost as much as Saint Ronnie but made a serious campaign issue out of the evils of high inflation. Am I the only one that remembers his laughable Whip Inflation Now pins? Not according to wikipedia heh.
Annualized growth rate for GW looks wrong
It is wrong.
True. I was just reacting to the fact that only time the numbers were negative by 1% or more was the Carter and Nixon administrations, both administrations were characterized by high inflation. Heck, Ford’s WIN cheerleading was an alternative to the phase I-IV federal wage and price controls of Nixon.
“I wonder how the Tea Partiers would react to that information, and whether they are are angrier at GW and Reagan than they are at Obama.”
Given the Tea Party emphasis on the debt and deficit, I really wonder why they voted Republican.
“ What I see missing however, is the role the the “baby boomers” have been playing in tearing down of the social fabric in the country. Am I incorrect to think that they have been the prime actors here? “
Well, when were the baby boomers in their 50s? (That’s when their power would be greatest.) That’s the second Clinton administration and the Bush II administration. Bush was an obvious disaster, and Clinton oversaw the end of effective financial regulation. So I guess the boomers are to blame.
I do acknowledge it might be interesting to show the inflation levels alongside that data esp since the effort was to show things in constant 2010 dollars.
If nothing else it might show that Ford was really a MAJOR borrow and spender once you factor in the inflation factor.
Tea party lacks numeracy.
Lemming lead around by billionaires’ mouth pieces.
Numbers help.
Just sayin’.
Although Tea Partiers indeed show an alarming willingness to sell out their own economic interests to billionaires they are in fact the true inheritors of modern Anglo-American conservatism as it developed from the 18th century on.
In both Britain and America over the last few centuries Conservatism can be summed up quite simply: making sure that THEIR tax money didn’t go to what was once called ‘the undeserving poor’. On both sides of the pond the ‘undeserving’ were identified with the ‘Other’ where the latter often included an ethnic/racial overlay (in Britain at various times ‘gypsies’ ‘tinkers’ ‘traveling people’ or simply ‘Irish’) but often as not just as perceived societal role (layabout, thief, vagabond, wastrel) where there might not be a specific ethnic/racial component at all.
You don’t need to be some social historian buried deep in statistics to see this dynamic play out, instead you just need to pick up just about any English or American novel of the last three hundred years and see the distinction between ‘good’ families and ‘bad’ families at every socio-economic level (not that the proportions of ‘good’ and ‘bad’ stayed equal as you moved up the income ladder).
In America the overwhelming influence of ‘the Peculiar Institution’ has led us to see this overwhelmingly in black and white, or as now black/brown vs white, but even in the most racially divided parts of the country the role of the ‘good family’ black as opposed to ‘white trash’ is recognized.
Are Teabaggers racist? Well of course they are going to deny it, after all they by and large are not entirely lying when they claim ‘some of my best friends are (fill in the blank)’, after all they likely rub elbows against them at work, or in the bowling league, or the supermarket check-out line, and maybe even in church. On the other hand they are reflexively likely to place any unknown black or brown person, and certainly those persons in the abstract firmly in the category of ‘Other’ or in old-fashioned terms ‘the undeserving poor’. And when it comes time to keeping ‘them’ in ‘their places’ some of their best allies are the rich guys in the mansion up on the hill.
Being a Tea Bagger simply means seeing yourself as being on the inside of the Us vs Them circle. (Along with every billionaire not named Aureus Goldfinger or in our world George Soros.)
Where We Are…Right Now
The reality is simple. The growth in projected cost and/or debt at all government operating levels along with the 3-5% GDP loss due to U.S. trade policy changes will continue to have a substantial negative net effect on the U.S. economy. Absent major changes in the operation of the U.S. economy, the downward spiral will continue and the result will be a lowering of standards of living for many American citizens. We are on that path.
The economic errors since the days of President Carter are astonishing and the political blame is shared by Republican and Democrat members of Congress as well as all Presidents. The same type of errors as well as others have occurred at State level and the same can be said for some government operations at county and municipal levels.
U.S. economic performance from 1994 forward (at a minimum) relied on substantial levels of credit which for individuals and households were unsustainable and are no longer available at previous levels. There will be no near term return to such credit levels and related economic performance. Moreover, the idea that the Federal Government will be in a position to support the shortfalls of States, counties, and municipalities on a continuing basis is unrealistic. As evidenced, the Federal Government will have it hands full in managing its operations absent major changes.
The Federal Government is presently on a budget operation path which cannot be sustained over the long term. Once the Government has cleared the recession hurdle, major changes will have to be implemented. Otherwise, economic failure and political unrest are virtually guaranteed.
Those who believe that business and consumer demand will bounce back to previous levels are out to lunch. That will not happen. The credit isn’t there to support it, nor is there a general willingness to pursue extensive credit at whatever levels are available.
I agree with Peter Morici’s opinion that the United States is outsourcing its economic strength, sovereignty, and standard of living. I disagree that China is the only source of concern on that front. Changes in U.S. trade policy opened the door much wider for continued loss of technology, R&D, and production to other parts of the world.
U.S. citizens and laborers have been conned at every step of the way for the past two decades. The results speak for themselves.
More citizens over time will challenge the existing political thinking of the major and somewhat useless political parties.
The United States will not turn the corner without major changes in the operation of the U.S. economy. It’s not more complicated.
The DUI economic party is over. There are casualties. And more will follow.
Awww MG, let them have their fun. Grabbing at straws is all they have.
I started two comments, but cancelled them. One centered on the Debt Held by the Public versus the Trust Funds, and the other was the extrapolation of the “O” debt. Glad to see you did a better job.
Folks, you are spinning yourselves into the ground over the failures of your favorite policies. Tea Partiers know specifically, and the few who do not know the specifics, intuitively, those budget/deficit issues that MG pointed out.
CoRev,
I was hoping that you were watching this thread.
There will come a day when others will get beyond the standard political BS and focus on what is unfolding with the U.S. economy regardless of which party is in power. The Tea Party crowd isn’t falling for that game. Others are too political or ignorant to see that.
We will probably see three or four subsequent election cycles whereby the incumbents are blasted out of office for failure to get the Government back on a sustainable fiscal track. It’s only a matter of time at this point. Get the job done or you’re fired. Simple.
Norman, FWIW, I’ve been taking a gander at this generational question out of curiosity, wondering whether Baby Boomer hippies or the members of the Greatest Generation deserve more credit/blame for ballot box outcomes that swung policies so far to the right. To my surprise, I found data pointing slightly more at the “Silent Generation” (in-between the Greatest Generation that fought WW II and the Baby Boomers, born roughly 1927-1945). For example, this is the age group that voted most in favor of Reagan over Carter in 1980 and most favored (by 16 percentage points) Bush I over Dukakis in 1988–and this group was large among those who voted in these years. Oh, by the way, Bowles was born in 1945 and Simpson in 1931 lol.
MG said: “Those who believe that business and consumer demand will bounce back to previous levels are out to lunch. That will not happen. The credit isn’t there to support it, nor is there a general willingness to pursue extensive credit at whatever levels are available.”
I think many forget just how badly the “Boomers” perturbed the economy. For the past several decades they drove economic growth as their economic situations improved. Ever increasing spending was the expected norm. Now that they have reached or near reaching retirement, their needs change. The occasional new auto, yes. But the bulk of their spending does not take credit. They are on maintenance level budgets, except for their growing medical expenses.
Economic stability, slow growth, is their latest perturbation.
Yes and if my Grandmother had wheels she would be a bus.
Feel free to forward your Improved Kimel 2.0 post to Dan but bitching because front page posts don’t match what you would produce if you were writing such instead of handing out reading/writing assignments to others adds very little value. Mike andI don’t write to your order. Deal with it.
MG and CoRev,
While I don’t dispute much of what you are saying, I don’t see any solutions coming forth from either of you. It’s great that you will use the President’s projections for the growing deficit and debt and interest on the debt. So what?
It still doesn’t change the fact that Tea Partiers are more upset with Democrats and this President than with debts and deficits. The last things we should be focusing on in this economy are the ‘double dd’s’. We should be focused on jobs and getting this economy moving again. Unfortunately, GDP will not recover unless somehow we can replace the debt-driven spending of the American public. There are two choices: Government spending or Business investment. Since Business will not spend until they see signs of increased consumer spending, the best bet is Government spending…in the SHORT-TERM. Once the economy starts moving (businesses hiring, consumers spending) then we must see a cutback in government spending. But until then…
Or they could just create their own sucky blog as Dr. Black suggests to his sometimes whiny commenters.
Gridlock, no! No! NO!!! We’ve tried the Govt spending and it stimulated nothing. Every GDP gain was short lived, dying back coincident with the end of Govt spending.
Businesses will begin to think postitively, start spending, and start hiring when the administration gets out of their faces. Threaterning legal action, regulation, taxes and Congressional reviews do not make for a business friendly environment. When will you guys (not just you Mr. Gridlock) begin to realize that?
How much lower does the economy have to fall before you realize which actual Dem policies are deleterious to it? Tea Partiers already know this!
Mike Kimel could have skipped providing an updated version of Dan’s September 14 post on Terence Jeffrey’s nonsense and focused on the reality of President Obama’s Budget projections through 2020.
He could have read the President’s Mid-Session Review, published on 23 July 2010 and cited some of the updated FY2011 budget data.
He could have outlined the projected deficits in the President’s Budget baseline which for FY2009-2020 (in billions) are 1,413 1,405 1,233 967 904 896 985 1,003 987 1,037 1,132 1,230. Conversely, he could have cited the President’s Budget proposal which according to the Mid-Session Review states deficits for FY2009-2020 (in billions) as 1,413 1,471 1,416 911 736 698 762 758 721 749 822 900.
He could have explained that projected Total Debt Financing for FY2009-2020 (in billions) is stated as 1,893 1,901 1,486 1,255 1,120 1,111 1,221 1,226 1,206 1,202 1,265 1,355.
He could have explained that projected Total Debt Outstanding, End of Year, FY2009-2020 (in billions) is 11,850 13,752 15,238 16,491 17,610 18,720 19,940 21,165 22,371 23,572 24,837 26,192.
He could have explained that Debt Held by the Public for FY2009-2020 (in billions) is stated as 7,545 9,199 10,550 11,602 12,459 13,264 14,134 14,984 15,795 16,619 17,514 18,505.
He could have explained that Debt Held by Government Accounts for FY2009-2020 (in billions) is projected as 4,331 4,579 4,716 4,917 5,178 5,483 5,833 6,208 6,603 6,979 7,349 7,713.
He could have explained that Debt Held by the Public is projected to grow from 53% of GDP in FY2009 to over 77% of GDP in FY2020, or could have shown the entire projection of growth for FY2009-2020 to indicate how quickly the percentage of GDP rises and stays in the 70% range for those fiscal years – 53.0% 62.7% 68.9% 71.7% 72.7% 73.2% 73.9% 74.6% 75.0% 75.6% 76.4% 77.4%.
He could have cited projected growth in Net Interest payments, which grow from $187 billion in FY2009 to $831 billion in FY2020 ($901 billion in the President’s Budget baseline) in the President’s Budget proposal. That would have opened a few eyes.
He could performed a few simple math tasks and explained that total outlays for Mandatory Spending and Net Interest payments on Debt Held by the Public are projected to rise from 65% in FY2009 to 75% of the Federal Budget in FY2020, thereby impacting the availability and operations of Government programs funded by Discretionary Spending unless additional deficit financing is pursued by the Government.
And he could have printed out a copy of CBPP’s projection of Federal Debt as a Share of GDP, 1940-2050, http://www.cbpp.org/images/cms/01-12-10bud-f1.jpg in order to capture his readers’ attention. That might have worked.
He could have done that. But he didn’t.
CoRev–Don’t you have a business that depends in part on government spending? Doesn’t every retail business in the country, for that matter? Now, remember here that since 1980 Repubicans have been in charge of two two-term adminstrations and one one termer. Since 1994 the Republicans have had the Senate and the House with only a 4-year interruption.
Whose fault is it and yes, the answer to the question is important! It’s too late to nickle and dime this recovery, if you call a permanent bout of flu a recovery. If the biggest single source of economic oomph in this country comes from the federal govt. why not use it to fix this mess? Do you want us to live in a permanent state of economic depression? As for threatening legal action, what’s the threat about? Oh, stealing people’s property, illegal foreclosures, fraudulent mortgage transactions and stock fraud are just business as usual? You don’t think so and don’t believe it. So, get real. NancyO
Gridlock,
I didn’t have any problem balancing the Federal Budget for 2015 or 2030 using this interactive model. I expect that you won’t have any problem, either.
Here it is:
Budget Puzzle: You Fix the Budget
November 13, 2010
http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html
“Today, you’re in charge of the nation’s finances. Some of your options have more short-term savings and some have more long-term savings. When you have closed the budget gaps for both 2015 and 2030, you are done. Make your own plan, then share it online.”
Good luck!
Norman–Hey. Boomers are people and people do all kinds of things. One of the things they have been doing since the 60’s is working and paying taxes. Buying houses, building up businesses, having kids and sending them to school, and so on. You may be a little older than I am but I suspect we both worked our butts off and did everything we were supposed to do. Everything.
When I was a kid, I heard all about how the baby boom put a strain on schools. Well, only if you didn’t want to build more. And, they wouldn’t fight in Viet Nam. Well, good idea, now that we look back at it. And, well, there was that pill thing. Had no effect long term except to keep a lot of guys from having to pay child support. And, the miniskirts. People got used to them and they disappeared eventually. And drugs, I guess. Oh well. I kinda missed out on that. Had to work.
Pretty dull stuff really. Don’t think the boomers had a lot to do with anything amounting to “tearing down the social fabric of the country.” In the 1890’s, robber barons were doing exactly what the Billionaire Boys are now, just on a smaller scale in a largely agrarian society. People don’t know a lot of history and we could use a dose of it now. No need to make things worse than they are. NancyO
Over eight years Reagan debt 100% increase. Over eight years GW about 55 % increase.
Reagan wins the cigar!
Yes, electoral whiplash.
I still fail to see how the teaparty addresses economic failure of this scale….who, and what is proposed. Is Morici a teaparty person?? I have only seen ‘free market’ statements.
NO, the walk down history lane is meningless. You folks are always claiming that Clinton taking far more than was needed (a budget surplus) was the epitome of good. No! It wasn’t.
Fault? Fault for what? You then go down the path of more Govt spending can only be good. No, again. As you have heard now many times, we do not have a revenue problem we have a spending problem.
Please, please, quit taking too much money out of the economy to let the Govt spend it. Govt does not do a very efficient job of spending, because there are too many sacred cows that need its annual share. Businesses create jobs and businesses grow the economy. All Govt can do is xfer dollars from the private side to the public side and then back to another portion of the private sector. That’s too many steps to ensure dollars get spent in a manner that may improve jobs and economic performance.
For each tax dollar collected and spent how do we ensure it is well spent to improve economic performance in a manner to add jobs? It is more jobs that you want, isn’t it?
Dan, I have never heard Moricii’s name associated with the Tea Party. That, however, doesn’t mean much. There are many small groups.
Tea Party (TP) members believe less Govt allows private sector to more efficiently deal with the added income. TPers also beleive that the huge deficits are causing their own economic probles, and that the heroic efforts have been counter productive. Many TPers are just realizing the value of TARP for the banking industry, and coincidentally themselves. They are not sure about the auto bailouts, unless they live in the reust belt. TPers also do not believe the Obama stimulus was at all effective. They might grudginly give it a benefit of delaying the inevitable. The inevitable? Downsizing the Fed Govt spending.
I love this phenomenon where the right gets all weepy about deficits once a president with a D by his name is inagaurated. Like the migration of birds and the motions of the planets it’s as predictable as sunrise.
“This one is quick and dirty because I’m very low on time…”
MG could have taken Mike’s post as presente. But he didn’t. Instead, MG insisted that Mike, who has done a tremendous amount of work over a number of years, do the work that MG wants him to do. This is a pretty standard trick – “You didn’t do it right because you didn’t do what I want you to do.”
In reality, Mike’s post is an apples-to-apples comparison, while MG is demanding an apples-to-oranges comparison. Mike has posted actual performance. MG is insisting that we compare projections to history, knowing full well that projections have historically proven a very weak guide to actual budget performance.
Not to mention that projections are, in most cases, based on current law, while Obama is urging Congress to change current law. So what we have is MG saying that Mike should have done more than Mike has already said he has time for, then cooking up a rather misleading project for Mike to undertake, and then casting asperigus when Mike doesn’t live up to the cock-eyed standard that MG demands.
Nicely done, MG.
Now, my turn to badger Mike. Doing the work and showing the results is valuable. Outlawing political views that disagree with your own (“spare me…”) is not valuable. It’s just declaring that since you own the bar, you get to say what people can talk about while they drink here.
I am not wild about many of Obama’s policy choices, but I don’t see any value in declaring at the outset that views which are more favorable toward Obama than your own are out of bounds. We ought to make good arguments for our own points of view, not outlaw others’ views.
“Tea Party (TP) members believe less Govt allows private sector to more efficiently deal with the added income.”
How does that square with MG’s emphasis on the benefits for US trade and voters and trans-national companies being more effiecient for themselves. Is there another part of the private sector that is in effect in a demonstrable manner?
Is it the get out of the way of innovation idea? Our own trade policy groups have lost the race already in a number of areas…
Dan, I said: “… less Govt allows private sector to more efficiently deal…” and MG/you said: “…MG’s emphasis on the benefits for US trade and voters and trans-national companies being more effiecient for themselves.”
Obviously, I see less conflict in the statments than you.
Yes, getting out of the way of innovation, investment, keeping more profit, etc. is how the TPers see growth (jobs & economic) happening. Less Govt instead of more Govt is a big differance in approaches. We can see how more Govt has worked. Now let’s try the alternative.
Let me be clearer…I see Morici’s statement as very different than yours. What does ‘more efficiently deal’ mean to you and your expectations of what is to happen?
Corev,
You have to be specific in how markets are geared to bolster American jobs, and quality jobs. Currently job growth by global companies is elswhere, shaped in part by aggressive gov. programs to enourage direct investment. What institution is there to address this issue if not the gov.
Dan, why the need for specificity? You mention “global companies”, but they are not the source for new jobs. New jobs = job growth. Small businesses are job creators. 50 to 70% of the new jobs are created by small bussinesses.
What issue are you trying to address with Fed Govt policy/action? Certainly not jobs. The current set of policies have been a miserable failure. Let’s try something different.
kharris, you can’t really be that ignorant, can you?
No middleman (Fed Govt) collecting (or borrowing), processing, then redistributing to programs that do not directly impact job growth. Much like today’s stimulus.
Inefficiency is defined as not actually supporting the goal (jobs), or supporting the extension of joblessness (unemployment insurance) and extending the inevitable cut of past excess spending (grants to states).
Ah yes. Only corporate bureaucrats can distribute government pork efficiently! It’s like a law of economics or something.
You can also look at chart data for inflation, unemployment, debt and gdp by president (and controlling congress party) at my site – MetricMash.com. Enjoy!