Debt Ceilings and The U.S. National Debt.

Let’s talk Money, Politics & Presidents. Political posturing and truth spinning over the last 85 years would have one believe that the following is true:

1. Republicans are conservative spenders and champion smaller government and lower national debt.
2. Democrats are socialist spenders that want to redistribute wealth through taxes and expensive social programs.

The interesting thing about history, mathematics and politics is all assertions are TRUE or FALSE depending on how they are measured.

Measurements:

First of all: Never look to ‘averages’ as a measure. Averages are for the masses – not a real statistician or analyst.  Averages are used to misrepresent facts thousands of times every day, by thousands of special interests.  Averages rarely have anything to do with real life outcomes. For instance, the average human being has one testicle and one mammary gland. While this is, on its face, factual, it does not represent reality.

The next biggest misused measure is ‘percentages’. There are some scholars that insist that, by definition, you cannot have more than 100% of anything.  When a glass is 100% full, it can get no fuller. Yet percentages are used to measure variances by mathematicians and accountants every day; whether or not is has relevance over time.

“Relevance over Time” is the critical objective of any measurement. But averages and percentages are in direct conflict with that objective if not given discrete rules of context.

In Figure 1 below the left side of the table represents the percentage the Nation Debt (aka Deficit) attributed to the ‘Top 10’ U.S. presidents by percent increase.  This is an ‘official’ accounting by the U.S. Government OMB. The mathematical context of the right side of the graphic tells a completely different story than the left.

Figure 1 - Presidents and Debt

Source: U.S. Office of Management and Budget (OMB)

If one were presented with ONLY the left side of the graphic above, Trump would be the biggest spendthrift of them all. That’s because ‘percentages’ are applied only in relation to the prior debt balance carried forward.

If one were presented ONLY the right side, Obama appears as the clear spending king.

The right side is a clearer indication of the how much each president actually contributed to the overall debt that now totals over $28trillion. But even that accounting is not in true context if we divide the amount added by the number of years in office.

Nor does the graphic have any context about the causes of the increases. i.e. Roosevelt had the great depression and WW2; Obama had the financial crisis and 2008 recession; and Trump had the 2020 COVID Crisis.

Nevertheless, using annualization will give us the most context for our measurements. Because, in reality, the impact of spending during a President's term depends entirely on how many terms they were in office. Which brings us to the measurements that truly matter. Using the OMB data, and comparing it to the number of years each president was in office, we get the clearest picture yet.

Figure 2 - Presidential debt by year

So, we have debunked every possible partisan spin on why the U.S. national debt is where it is today. It’s not a partisan issue. It’s an American issue. And its as American as apple pie.  Of the five largest contributors to the national debt, four of them are ‘conservatives’.

You see, Americans live on debt. We mortgage our homes, max our credit cards, finance everything from appliances to automobiles. Big business sells stocks, bonds, and promises to gain capital for operating and competing. 

The U.S. government is the single largest employer in the World. They are no different. They consistently mortgage the next generation for the current one and it has nothing to do with which political party is at the helm.

The ‘debt ceiling’ you hear so much about has nothing to do with future spending. In has to do with historical appropriations. The last administration gets approval to spend what the next administration has to cover. And that is why we raise the debt ceiling – to cover all the appropriations made in past years.  

The minority political party will ALWAYS try to hoodwink the voters my opposing raising the debt ceiling to cover the spending they likely already approved of.

God Bless America