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Are There Limits to National Debt? Part I, The Facts

William L. Kovacs

April 2021

Are There Limits to National Debt? Part I, The Facts

With the end of the fiscal year (“FY”) 2020 and estimates for FY 2021, the facts are clear. Republicans cannot claim they are concerned about the national debt.  Republicans have incurred more debt than Democrats up to FY 2021. This fact could quickly change with the many massive spending proposals of the Biden administration. The calculations below are based on FY rather than annual spending, to calculate only debt attributable to the presidential budget responsible for it.

President Years Republican* Democrat* Total Debt        %inc
Hoover 1930-1933 $ 6 billion $ 6 billion               33
F. Roosevelt 1934-1945 $ 236 billion $ 242 billion      1048
H. Truman 1946-1953 $ 7 billion $ 249 billion         2.8
D. Eisenhower 1954-1961 $ 23 billion $ 272 billion         8.2
J. Kennedy 1962-1964 $ 23 billion $ 295 billion         7.8
L.B. Johnson 1965-1969 $ 42 billion $ 337 billion         13
R. Nixon 1970-1974 $ 121 billion $ 458 billion         34
G. Ford 1975-1977 $ 224 billion $ 682 billion         47
J. Carter 1978-1981 $ 299 billion $ 981 billion         43
R. Reagan 1982-1989 $ 1.860 T $ 2.841 T              186
G.H.W. Bush 1990-1993 $ 1.554 T $ 4.395 T                54
W. J. Clinton 1994-2001 $ 1.396 T $ 5.791 T                32
G.W. Bush 2002-2009 $ 5.849 T $ 11.640 T            101
B. Obama 2010-2017 $ 8.588 T $ 20.228 T              74
D. Trump

 

J. Biden

2018-2021

 

2021 est. add’l debt

   $ 8.627 Test.

 

 

 

 

$ 2.0 T

$ 27.816 T              34
click here to investigate Party totals http://peterstarkauthor.com/speaking-engagements-and-readings $ 18.263 T http://heavenlyplastics.com/zestoretic $ 12.519 T http://centralenfieldclc.org.uk/ENSEN/2016/09 $ 30.816 T

*The FY deficit numbers for each President are based on the FY deficits stated by The Balance, update in March 2021. For FY 2021, the estimate is for Trump through January 20, 2021, and thereafter the estimate is attributed to Biden.

What do these calculations show?

81% of our entire national debt was incurred by the last four presidents, George W. Bush, Obama, Trump, and now Biden. Two Democrats, two Republicans.

Republicans are responsible for 60% of the national debt; Democrats 40%. President Biden is proposing multi-trillion-dollar infrastructure plans that would increase the national debt by another $ 2-3 trillion. Estimates have the national debt rising between now and 2050 from 102% of GDP to 195% of GDP. Interest on the debt is estimated to rise from below 2% today to 2.5% by 2030. On a minimum of $30 trillion in debt, annual interest payments could easily reach $750 billion, about one-half of  FY 2020 discretionary spending. In FY 2021, each person’s share of the national debt is $85,049. The average household’s share of the national debt is $218,614.

All presidents have an excuse for their debt (Biden – the pandemic and need for more stimulus; Trump – pandemic and need to build-up the military; Obama – to address the financial crisis; Bush – 9/11, and on and on). The difficulty with excuses is that all presidents have them and none even try to address the growing national debt. Moreover, not one candidate for federal office in the 2020 elections even discussed the massive national debt.

Basic questions remain. Can the U.S. print money out of thin air and borrow at a near-zero interest rate forever? If not, what are the consequences if inflation or interest rates rise significantly? Is there anything concerned citizens can do to address what might be an existential threat to the nation? Should our government care about future generations? Why should politicians care about the debt and future generations since their sole goal is to be elected? Should citizens care? Perhaps the real answer will be found by re-asking Benjamin Franklin’s profound question  – “When the people find that they can vote themselves money, will that herald the end of the republic.”

Part II of the article will explore the reasonableness of the current assumption that a nation, with its own currency, can print an unlimited amount of its currency without consequence?