On the truthiness of Obama debt vs. Bush debt

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Zapata's picture
Zapata
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On the truthiness of Obama debt vs. Bush debt

Okay, so last night I'm in a bar talking to a guy about debt and I mention something I heard in the movie Overdose, The Next Financial Crisis, which was (to paraphrase), "Under his presidency Bush racked up nearly as much debt as all previous presidents combined, and Obama is racking up almost as much debt as all previous presidents combined, including Bush" [That line came from the narrator with no references, I assume it was written by Martin Borgs, the filmmaker]

So anyway, the guy gets irate and starts spewing numbers... admittedly most of what I know about economics I learned from the Crash Course so I was out of my depth... also I think he was on cocaine (I live in Costa Rica, so that's very common) and I couldn't get a word in edgewise.

Then a right-winger overheard him and they got into it (thankfully ignoring me) nearly coming to blows.

I did manage a triumphant moment when I over-yelled them for a second and got them to both consider a single question: Can a fiat currency system continue to grow without eventual collapse? (Thanks to Chris Martenson for that bit of jargon). They paused in a moment of deafening silence, then both responded simultaneously "No". Then they went back to yelling at each other completely unaware that they had just agreed on the main subject of the argument.

My question is: Is there any truth to the statement, "Under his presidency Bush racked up nearly as much debt as all previous presidents combined, and Obama is racking up almost as much debt as all previous presidents combined, including Bush"?

(Answers hopefully with some backup that a non-economist can understand, and without cocaine induced yelling.)

Thanks,

Zapata

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cmartenson
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Re: On the truthiness of Obama debt vs. Bush debt

"Under his presidency Bush racked up nearly as much debt as all previous presidents combined, and Obama is racking up almost as much debt as all previous presidents combined, including Bush"?

The answer is "yes" but only if you don't inflation adjust the numbers, nor consider that some of the debt was paid down (or back) here and there, mostly right after WWII.

The truth in the statement rests on this observation:

Inauguration day                   Federal Debt

01/19/2001 ..........................  5,727,776,738,304.64

01/20/2009 .........................  10,626,877,048,913.08

That's pretty close to a double.

Also left out of this simplistic view is the growth in government liabilities.  With a single stroke of a pen, in signing Medicare part D into law, GWB added $11 trillion to the total liability pile.

sowhatareyousaying's picture
sowhatareyousaying
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Re: On the truthiness of Obama debt vs. Bush debt

That doesn't validate the second part of the statement, which implies that Obama has already, in 19 months, increased the national debt as much or more than Bush did. 

Zapata's picture
Zapata
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Re: On the truthiness of Obama debt vs. Bush debt
sowhatareyousaying wrote:

That doesn't validate the second part of the statement, which implies that Obama has already, in 19 months, increased the national debt as much or more than Bush did. 

And that was the bone of contention- he was perfectly willing to accept that Bush had done such a thing, but not Obama.

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Doug
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Re: On the truthiness of Obama debt vs. Bush debt

sowhatareyousaying

Quote:

That doesn't validate the second part of the statement, which implies that Obama has already, in 19 months, increased the national debt as much or more than Bush did. 

That isn't what Zapata said.

Quote:

"Under his presidency Bush racked up nearly as much debt as all previous presidents combined, and Obama is racking up almost as much debt as all previous presidents combined, including Bush"?

Rather than in the past tense, he is saying that Obama is in the process of doing so.  If his current rate of adding to the deficit continues, Obama may well double the debt in eight years.  According to at least one version of the debt clock, the Fed. Gov't. is currently in debt for $13.7T.

http://www.brillig.com/debt_clock/

When Obama took office the debt was approximately $10.7T. http://nationaldebtbusters.blogspot.com/2009/01/newest-national-debt-statistics-posted.html  So, that's $3T increase in about 20 months.  If he is in for 8 years, at this rate Obama will have run up an additional $14.4T in debt, more than doubling the debt when he took office.

Of course, I doubt that anyone expects this rate to continue for another 6 1/2 years.  There are likely to be any number of intervening factors.

Doug

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nickbert
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Re: On the truthiness of Obama debt vs. Bush debt

Perhaps if you count all the 'guarantees' that the US is potentially on the hook for, maybe our current president and congress HAVE accumulated more debt than most other presidents combined.  But since no one knows for sure how much of these guaranteed instruments will crap out and to what degree (or if we'll actually honor the guarantee!), I personally would hesitate to present them as a solid figure. 

But aside from all that it seems like statements like those are a little dodgy to begin with, since they strongly imply the presidents have strong control over the budgets which isn't the case.  Most members of both parties in Congress throughout both administrations share as much or more blame for the situation.  

I can understand how that statement helps illustrate a rapidly growing problem, but it also has a lot of potential for starting arguments and finger-pointing.  Maybe it would be better phrased in terms of time spans rather than presidents... it seems there's been little difference in the direction the debt has gone (exponentially growing) in between the two presidents anyway.  But hey, it's his movie not mine Wink

- Nickbert

 

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