Though the debt numbers alone do not tell how much credit or blame the president deserves, they are interesting. Data from The White House 2012 President's Budget. Since the figure is for the end of the year and the President takes office one month into the year, they correspond well with tenure.
During 20 years of the presidencies of Reagan, Bush I and Bush II, the federal debt as a share of GDP increased by a cumulative 43% of GDP. During the 4 first years of the Obama presidency, it has increased by 36% of GDP.
This is how the Presidents rank in terms of development of the Debt/GDP ratio per year of tenure:
1. Clinton -1% per year
2. Reagan, Bush II: +2% per year
3. Bush I: +3% per year
4. Obama: +9% per year.
Tino,
ReplyDeleteWhile interesting it simply shows that more than anything over the last 30 years we have been borrowing now to pay later.
A more disturbing trend has been the slow down of the nominal GDP growth over the last little bit. From 1945 until now we averaged a nominal GDP growth of 6.6%, during Clinton we averaged 5.4%, Bush we averaged 4.1%, and now under Obama a slow 3.7%.
This underlies a fundamental weakness that I believe has to do with too much Government. Government has little ability to 'make' the economy perform better. It however has a large part in damaging and slowing economic growth down. So I do not give credit or blame to any of the presidents in recent time for what they have 'accomplished' Clinton got lucky, all he had to do was not spend much money and everything went great. Bush spent too much believing that Keynesian theory from both a push and pull philosophy would cause growth, which it did but it was not sustainable growth. Obama, well I am still trying to figure out what he believes.
Yet none of these presidents are tackling the REAL issue facing the United States economy, simplification and streamline of regulation mandates. Oh well...
Course I could be wrong, but as each year more laws, even under Bush and Clinton, and especially under Obama. Add more and more weight to companies trying to succeed, well...
That's a great chart to show people who say "where were you when GW was spending like crazy". The answer is of course, we were there and about 1/6th as upset as we are now that the deficit is 6 times larger.
ReplyDeleteIn fairness to Republicans, you should indicate congressional control as well since Congress plays a larger role in deficits than the president.
Also, I don't think it's correct to include debt held by the government or the Fed. That's funny money.
If the money that prior generations promised to themselves counts as a liability then the earnings of the people, unborn at the time, that they promised to take should count as assets.
-Mercy
Obama doesn't pass a budget the day he takes office. Much of 2009 would have been under a Bush budget I presume.
ReplyDeleteDeficits are a function of 2 things. Spending and tax revenue. When an economy collapses tax revenue drops and government expenditures autoamtically increase as more people qualify for Medicare or unemployment compensation. This deficit increase doesn't really mean we are following a Keynsian path.
What we're really doing here is following an austerity path. That is the path of Greece, Spain, Ireland, and Italy. More recently Germany. Some countries followed a more Keynsian approach. Iceland. Also Argentina in the wake of their 2001 crash. They've followed a left wing economic path. Contrast their performance with the austere nations.
Because we are on net austere when you consider both federal and state expenditures, people like Paul Krugman noted that we should expect continued high unemployment, continued low inflation, continued poor performance generally. That's been pretty much right on.
@Jon,
ReplyDeleteI think you are misunderstanding the real reasons for economic inactivity in Europe and the USA versus those other nations. Germany's woes are coming as a portion of those other nations you mentioned not because of 'Keynesian' Economics or the lack there of in those nations. Please don't listen to Krugman, he is right for the wrong reasons.
Iceland and Argentina are not doing 'well' because of their social spending, it has more to do with a positive trade balance. Their growth is also nothing to boast of, more it is something not to snicker at in comparison.
We will continue to see more of the Same in the United States not because of a lack of Keynesian economic activity, which is VERY robust. But rather because of our lack of industrial and mining of raw materials growth.
We need a new revolution in those areas, or more specifically a revitalization.
That is the way to break the malaise.
Jon: "Obama doesn't pass a budget the day he takes office."
ReplyDeleteWell, he did sign the stimulus package within one month of taking office. That amounted too close to a cool trillion dollars, more than the entire cost of the Iraq war two that point.
The spending spree really started to take off after the Democrats won both houses of Congress in 2008.
In addition, there are plenty of honest and fair economists on the left. Paul Krugman is not one of them. It's hard to think of an econ writer who does more of a disservice to his readers.
-Mercy
Whoops that's after the Dems won in 2006.
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Have a Safe & Happy New Year! :-)
The American Federal debt is already almost $17 trillion...it's funny, it looks like just a few months ago it was only $16 and now it is one trillion more. Things look extremely ugly now. But you know what makes me worried the most...I do not see any changes coming. Looks like the worst time are only about to come. I thought that my worst times were when I was using money advance loans, but looks like was so wrong.
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