- The national debt of the United States barreled past $US23 trillion on November 1, according to data from the Treasury Department.
- It marked the most money the federal government has owed and is a result of a growing budget deficit, which neared $US1 trillion in the last fiscal year.
- Yet three years into a norm-shattering presidency, Donald Trump’s spending binge doesn’t end up wrecking another.
- He’s in line with past Republican presidents like George W. Bush, who racked up deficits with boosts in military spending and tax cuts.
- The pace at which Trump has added to the national debt isn’t as surprising as it might initially seem. A different picture emerges when you look under the hood.
- Here’s how Trump’s share of the federal debt compares with Bush’s, Barack Obama’s, and Bill Clinton’s.
- Visit Business Insider’s homepage for more stories.
The national debt of the United States barreled past $US23 trillion on November 1, according to data from the Treasury Department. It marked the most money the federal government has owed and is a result of a growing budget deficit, which neared $US1 trillion in the last fiscal year.
To put that in perspective, the $US23 trillion figure is roughly equal to the economies of China, Japan, and Germany combined, according to the Peterson Foundation, an organisation advocating deficit reduction.
Yet three years into a norm-shattering presidency, Donald Trump’s spending measures up similarly with that of his predecessors.
He’s in line with past Republican presidents like George W. Bush, who racked up deficits with boosts in military spending and a wave of tax cuts. Trump has added about $US3 trillion to the national debt so far during his nearly three years in office, despite his pledge to wipe it out in eight years and his campaigning on being “the king of debt.”
The pace at which Trump has added to the national debt isn’t as surprising as it initially might seem. A different picture emerges when you look under the hood.
Breaking down each president’s debt spending
The Treasury has tracked the daily accumulation of debt since January 1993, when President Bill Clinton was in the White House.
From January 20, 2017, to November 1, Trump piled $US3.1 trillion onto the debt, amounting to a 16% increase. That’s significantly less than the $US4.3 trillion President Barack Obama added from January 2009 to November 1, 2011, but far more than the $US1.1 trillion Bush added in a similar period and the $US794 billion Clinton did in 1,016 days as president.
There is a key distinction separating the circumstances behind Trump and Obama’s debt figures. Trump inherited an economy undergoing its longest sustained expansion. Obama, on the other hand, entered the White House as the nation veered into a recession that sparked massive stimulus spending and a bailout of the auto industry.
The accumulation in percentage terms adds another perspective:
- The federal debt increased by 19% through November 1 of Clinton’s first term in office and grew by 36% through fiscal 2000, the last of his presidency.
- For Bush, the debt grew by 20% through the same date and ended up swelling by 36% at the end of fiscal 2008.
- The debt surged by 41% in Obama’s first 1,012 days in office, ultimately ballooning by about 84% as fiscal 2016 drew to a close.
- Under Trump, the debt has grown by roughly 15% in three years so far, and the Congressional Budget Office projected that it could swell by 43% more by the end of fiscal 2024 at current spending levels.
Conventional economic thinking maintains that deficits will decrease when the economy is healthy as the government pulls back on spending and draws more tax money as a result of lower unemployment.
Meanwhile, Trump and Republicans have embraced tax cuts and spending increases, arguing that will boost the American economy.
Marc Goldwein, the policy chief for the Committee for a Responsible Federal Budget, told Business Insider that there had been a substantial shift in Washington’s approach to federal spending in the past several years. Under Obama, Republicans championed fiscal responsibility and called to reduce the deficit – now they have largely tossed it aside.
Instead of cutting the deficit, he said, both parties are competing to ramp up spending on domestic programs as well as defence.
“Democrats wanted to do it with tax increases, and Republicans wanted to do it mainly with spending cuts, but what they were fighting about was who had the better plan to reduce deficits,” Goldwein said. “Now it seems they’re fighting over who can promise more in spending increases and tax cuts.”
While Goldwein said that while the debt could lead to “slower economic growth” in the “medium or long term,” it doesn’t damage the economy as much in the short term.
“Just by the virtue of the fact that interest rates are lower, it’s certainly true that each dollar of debt is less than a threat than we thought eight years ago,” he said.
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