There is a little graphic being circulated around the Internet intended to show that President Obama has recklessly doubled the total US debt accumulated since President Washington.
As a piece of political propaganda it is brilliant. It implies that President Obama’s administration is worse than all previous administrations when it comes to debt. Is it? As a performance “indicator” it is not so good.
The US debt is growing exponentially, and has been for 40 years under all presidents. Think of a pond with exponential growth of lily pads. Every week the number of lily pads growing in it doubles. How full was the pond one week before it was completely full of lily pads? Half full, and it took many weeks to get there, just like the US debt took many presidents to get to the point where it had half as much debt as today. A better indicator of exponential growth is not how long ago there was half as much, but the length of the doubling period.
To account for increasing population, it’s better to measure how profligately US governments have been going into debt by calculating debt per capita rather than gross debt. In September 2011, US debt per capita was $47,652. It took 8 years, from 2003 to 2011, for debt/capita to double from $23,826. So the graphic is superficially correct. (It would also be better to account for inflation and use constant dollars. The trouble is; what indicator of inflation should be used? See here and here and here and here.)
The chart below shows the terrifying picture of US debt/capita since 1791.
The huge debt figures at the end of the 20th century completely mask what was going on in the 19th. Debt per capita actually declined most years, with the exception of the period during the Civil War (see below).
The 20th century is a different picture all together, as seen in the chart below. The scale shows powers of two, to make it easier to see how long it takes it to double debt/capita. There were two jumps in World War I and II. Between and immediately after the wars debt per capita was flat or declined. Then around 1970, debt per capita took off.
The chart below works backwards, starting with the current debt/capita of $47,652, and then downwards to show the year at which the debt per capita was one half this amount, one quarter and so on. Each time the debt/capita line crosses the dotted horizontal lines, debt has doubled (going left to right) or halved (going right to left).
From 1976 to 2011, debt per capita grew 16 times—that means it has doubled 4 times (from $2,978 to $47,652). That’s a compound average growth of 8.2% in debt per capita.
At 8% growth, debt per capita will keep doubling every eight or nine years or so. That’s how long it took to double it to President Obama’s number from George W. Bush’s number in 2003. All he is doing is holding the shovel steady as the US inexorably digs a deeper hole.
(Note: to calculate debt per capita I linearly interpolated US population between censuses, which are taken every ten years. Source of debt data: http://www.treasurydirect.gov).
I don’t see your logic. Consider these two statements:
“At 8% growth, debt per capita will keep doubling every eight or nine years or so” (per your analysis)
“Dept has doubled in the last 3 years from 6.3 to 12.8 trillion dollars.” (per the graphic).
This would indicate to me that dept under Obama has increased at far more than twice the rate of previous administrations. If your trend had proven to be accurate the dept should now stand at about $8.4 trillion. A rough estimate is that the growth rate has increased from 8% to 26% under the Obama administration.
You seem to be mixing up the change in debt per capita and the change in debt.
All this analysis is interesting, but somewhat irrelevant. The issue is not the size of the debt per se, but the size of the debt in relationship to what one can afford. A large debt to a person making $50,000 per year is very different than a large dept for a person making a $1,000,000. So the basic equation (a.k.a., indicator) is what is the debt compared to the ability to pay and that is defined by GDP. This is basic lending and borrowing common sense and where Obama’s actions become downright scary.
For starters, since World War II something interesting has happened. Ironically, every Democratic administration has actually lowered the debt to GDP ratio and every Republican administration has actually raised it. Now, the debt has continued to rise dramatically through those years, but so has the ability to pay as defined by GDP. All that changed drastically with the Obama administration.
Until Obama, the second Bush administration was the worst as it raised the debt to GDP ratio from somewhere aroud 56% to around 63% over the course of 8 years. For some perspective, the European Union mandates that no country is to run a ratio over 60%. In fact, they are trying to get Greece to 120% debt to GDP and the ECB admits that is still at crisis levels.
So here is what is staggering, Obama moved that US ratio from about 63% to right at 99% in less than two years. Did anyone notice how close 99% is to 120%? It’s actually worse than that, but we’ll leave out any discussion of the banking crisis.
Now, the first thing someone will say it that Obama was dealing with a recession. True, but that only accounts for a percent or two out of the 26% increase. Obama simply spent more money faster with less ability to afford it than any president in history and it’s not even close. It’s one thing to spend a mountain of money when the debt to GDP ratio starts at say 40%. It’s an entirely different issue when you do it starting at 63%.
If you are curious, these numbers are from the OMB, CBO and the US Treasury. Although they differ slightly they all say the same thing. So, if you have the stomachs for it do your own research. Don’t listen to the talking heads or the propaganda merchants. The numbers are really scary.