Presidents and Their Debt: From FDR To Obama
With the National debt of large concern recently and the debt ceiling debates continuing, many want to see the figures as to what President Barack Obama has done toward the US National Debt. Last year it was reported that Obama added more to National Debt in his first 19 months than all U.S. presidents through Ronald Reagan combined with an increase of $2.5260 trillion. That is more than the cumulative total of the national debt held by the public that was amassed by all U.S presidents from George Washington through Reagan. From CNSnews.com,
“At the end of fiscal 1980, four months before Reagan was inaugurated, the federal debt held by the public was $711.9 billion, according to CBO. At the end of fiscal 1989, eight months after Reagan left office, the federal debt held by the public was $2.1907 trillion. That means that in the nine-fiscal-year period of 1980-89--which included all of Reagan’s eight years in office--the federal debt held by the public increased $1.4788 trillion. That is in excess of a trillion dollars less than the $2.5260 increase in the debt held by the public during Obama’s first 19 months.”
As of June, once the national debt passed $13 trillion mark the Obama administration had increased the debt by $3.398 trillion in just 710 days. The fiscally conservative community is calling for Obama's head as unemployment and inflation continue to hammer the current economy. But lest we not learn from our past presidents and see that debt is practically ingrained in our history. As famed author H.W. Brands said, “Since George Washington, presidents have embraced public debt as an investment in America's future.”
Start of presidency 1981: US National Debt $997.8 billion
End of presidency 1989: US National Debt $2.1 trillion
Reagan began his presidency with a federal deficit of 2.5% of national economy and ended his two terms with that number doubling to 5%. Just four months into his presidency, Reagan told Congress that high taxes and big spending made the present economic mess and that doing the same won't get the U.S. out of their struggle. That moment cemented Reaganomics and our current economics woes. The Democrats that fell at Reagan's feet has to take their “spend and tax” methods and jump on board the “spend and borrow” Republicanism. To defeat former Vice President Walter Mondale in the 1984 election, Reagan's chief of staff passed him a note. On the note read “Taxes are a big picture issue. If we want to win – and win big – the exigencies of the election force us to solemnly swear that Mondale is the tax increase candidate and Reagan is the no-tax-increase candidate.” The note ended by saying after Reagan get re-elected, he could do whatever he pleased with the generalizations like the deficit. Interestingly enough previous Vice President Dick Cheney said that politically Reagan showed that deficits don't actually matter. Reagan proved that by running up more debt than any prior president and easily won re-election.
Franklin D. Roosevelt:
Start of presidency 1933: US National Debt $22.5 billion
End of presidency 1945: US National Debt $258.5 billion
Our only president elected to more than two terms and the man behind the New Deal many conservatives consider the “tax and spend” policies that lead to incredible fiscal misery. As David Kennedy says, “Yes, Roosevelt was a bold and visionary innovator who substantially rewrote the American social contract [with his signing of Social Security into law in 1935]. But the Beelzebub of the Budget he was not.” Roosevelt was a stubborn fiscal conservative yet was always compared to former president Herbert Hoover's deficit, which he exceeded twice (1934, '36) after the New Deal. In 1936, Roosevelt had the largest absolute deficit of $4.4 billion, or 5.3% of Gross National Product (with help from a overlooked Roosevelt veto from Congress for Bonus Bill $2 billion for World War II vets.) The Roosevelt Recession followed as he produced an austerity budget which drastically reduced government spending and the economy crumbled; unemployment ballooned to 19% from 14% and generated deficits reached nearly 30% of G.N.P.
Start of presidency 1963: US National Debt $306 billion
End of presidency 1969: US National Debt $353 billion
LBJ had a lot of issues to deal with in his time in office, particularly in 1968. Fiscally Johnson had to find a way to fund the Vietnam conflict and his Great Society reforms all while anti-war demonstrations, inner city riots and violence in Chicago during the Democratic convention stood in his way. Americans did not want tax increases but an economic collapse was destined if Johnson's plea for a 10% tax surcharge was enacted. Congressional conservatives wanted cuts to domestic spending instead of the surcharge but Johnson said failure to pass a tax surcharge would mean “a major world political defeat for the United States,” and LBJ got what he wanted against 79% of Americans wishes. US National Debt grew by $21 billion in 1968 alone, closing out Johnson's presidency on a very sour note.
Start of presidency 1969: US National Debt $353 billion
End of presidency 1974: US National Debt $475 billion
The proudly proclaimed conservative Keynesian, President Nixon focused much of his early presidency on foreign and domestic economics as he took the reigns from Johnson's dwindling US economy and faced inflation within his first eight months in Washington. He didn't take a high priority on balancing the budget and by 1970, the economy looked to be heading to a recession. Joan Hoff explains,
“Nixon became the first president to submit a budget based on “the high-employment standard,” which meant the country would spend as if it were at full employment to bring about full employment, thus justifying an “acceptable” amount of deficit spending. Second, he dramatically announced in August 1971 what he called the New Economic Policy. The N.E.P. attempted to balance U.S. domestic concerns with wage and price controls and international ones devaluing the dollar.”
He failed to obtain more revenue through tax reform in 1969. With that, unemployment rose to 4.9% in parallel with inflation jumping to 5.7% which set off the federal budget deficit totaling $23.03 billion. But there was positives his N.E.P. as unemployment fell and output rose and he became the only president since World War II to bring an economic upturn in a presidential election year and he was re-elected.
Start of presidency 1945: US National Debt $258 billion
End of presidency 1953: US National Debt $266 billion
Truman was the first president since 1930 to reduce the nation debt and according to the numbers, the only president to truly make an effort to cut the debt significantly. His first year in office Truman was preceded by Franklin Roosevelt's big spending to dig the country out of Depression with astronomical year-to-year national debt change. In 1942, FDR's national debt went up by $23 billion, then up $64 billion the next year, another $64 billion the following year, and to close out his presidency in 1945 with another large increase in debt by $57 billion, totally over $200 billion in increased debt in his last term. The numbers drastically dropped once Truman came to office, and within his 18 months in office, he reduced the debt by $11 billion and by the time he left office in 1953, he is the only president of the 1900s to exist the Oval Office with a reduced year-to-year national debt total.
Start of presidency 1953: US National Debt $266 billion
End of presidency 1961: US National Debt $288 billion
Preceding Harry Truman in terms of fiscal resolve was a difficult task, but some could say Eisenhower lived up to the role fairly well. He continued all of the major New Deal programs and focused much of his attention toward nuclear weapons over conventional arms which was more of a fiscal policy than anything else. Eisenhower feared that the costlier conventional forces would unbalance the federal budget and thereby undermine American freedoms. His plans proved successful as he is the last president to reduced the year-to-year national debt (1955: $1.6 billion reduced, 1956: $2.2 billion reduced).+7
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