National Debt Passes $13 Trillion

May 30th, 2010 by Lee Eldridge

Our national debt has now passed $13 trillion, and will surpass $14 trillion before the year is over. That is just amazing to me. Take a look below at the escalation of our national debt in recent years, and notice the huge jumps during the last few time periods.

National Debt

So what does this mean? Nothing good, I guarantee you that. A ballooning national debt will be a significant drag on our economic recovery, and could be partially responsible for driving us into another recession — what many refer to as a double-dip recession.

A Look Back
In 1990 our national debt was approximately $3.2 trillion. Despite the strong economic times of the ’90s, our national debt grew to approximately $5.6 trillion by 2000. That’s an increase of 75% over a ten year period. While that seems like a lot to me, that’s by far our best decade since 1960-70 where our debt increased by only 31%.

In comparison, from 1970 to 1980, our national debt more than doubled from $381 billion to $909 billion. And from 1980 to 1990, our debt increased more than threefold from $909 billion to $3.2 trillion. (During the ’80s, Reagan was spending tons of money on the military, and the democratically controlled Congress was spending tons of money on everything else. The ’80s were an interesting economic period that we can discuss at a later time.)

Now let’s look at what’s been going on this last decade. From 2000 to 2010, our national debt will have increased from $5.6 trillion to approximately $14.4 trillion, though that’s still an estimated figure. It could end up higher than this. That’s almost a tripling of our national debt in only 10 years.

Finger Pointing
This is why I don’t like either party. The Republicans like to pretend that they’re the party of financial discipline, but while they largely controlled Congress from 2000 to 2006, our debt grew from $5.6 trillion to $8.4 trillion. While not a booming economy, this was certainly a period of steady growth. There’s no good excuse for increasing our national debt by 50% during this six year period.

The Democrats condemned the Republicans as fiscally irresponsible. So what has happened since they took control of Congress in 2006? Our national debt is expected to balloon to $14.4 trillion by year’s end. They’re close to doubling our debt in only four years. Add to that another whopping increase anticipated over the next five years of approximately $5 trillion. By 2015, it’s expected that our national debt will be approximately $20 trillion.

The Recession
Democrats are going to write to me and tell me I’m wrong. That our national debt is ballooning because of the recession caused by Bush, and that recessions reduce tax receipts to the federal government. And they’re partially right. Recessions DO decrease tax receipts. (We can debate at another time the primary causes of this recession — Bush was only a piece of the puzzle that was built over the last 20 years that caused this recession.) But that’s why we MUST pay off debt during periods of economic growth. A small level of deficit spending during a recession is needed, in my opinion. You can’t shut down federal programs that our public relies on for everyday life. That’s why I do not support a balanced budget amendment. But the only way deficit spending during a recession makes sense is when you’re paying OFF the debt during periods of economic growth.

So why do I say that they’re partially right? Because the out of control spending from our federal government is HURTING our economy, not helping it. And by hurting the economy, they have further exasperated the problem of reduced tax receipts to the federal government.

What To Do
They’ve got to get spending under control. It will be painful, but it can be accomplished. Some economists are predicting a lost decade. That we can’t return to economic prosperity any time soon. I say they’re wrong, but I’m an optimist at heart.

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4 Responses to “National Debt Passes $13 Trillion”

  1. ralphie Says:

    If no Bush – then no Tarp. If no Bush, then no 750B Stimulous bill by Obama.
    Or perhaps, if no almost depression, then we dont have those bills, since virtually the whole congress, ds and rs were supportive in theory.
    We can debate who you think was most resposibile for the economic meltdown.
    WHile HCR is going to be costly, its a long term priority shift for the US that will eventually save money. We have to start heading down the road to these policies eventually, and it should have happened a long time ago. If the US can prioritize spending money to rebuild other nations, stockpile nukes, the war machine, tax breaks for rich people (instituationlized corporate welfare), then basic amercians should also get a bone too, a la healthcare.

    The Republicans just killed his proposed debt commission after initially supporting it. What are they proposing to address the debt?

  2. ralphie Says:

    I think the lost decade was 2000-2008, if you round up. Thats the time when the seeds were laid that decimated our tax base, escalation of corporate welfare, environmental lassie faire thats haunting us in the gulf now.

  3. blackbelt_jones Says:

    When talking about changes in the federal deficit, it’s important to note that Obama changed how the deficits are calculated by removing accounting tricks that previous presidents used to lowball the numbers. This probably seemed like a good idea at the time, but when people talk about how the deficit has ballooned under Obama, it makes the discussions confusing and suspect. I’m not saying that your numbers are bad. I’m saying that I have no idea.

    http://www.nytimes.com/2009/02/20/us/politics/20budget.html

  4. Lee Eldridge Says:

    Good morning blackbelt_jones.

    I’m really glad you pointed this out, because debt and deficits are confusing. But they’re different. I wrote a post on this some time ago:

    http://www.leeeldridge.com/budgets-debts-and-deficits-oh-my/

    The accounting practices changed by Obama (that I’m in favor of) are in regards to the yearly budget deficit that we run. And how the numbers are calculated. Bush had been criticized (correctly) for basically hiding the financial costs of war by not including those costs in the budget or showing them in the projections of the budget deficits.

    But these accounting practices having nothing to do with our national debt. No matter what is hidden in the budget, or hidden from projected deficits, it still all ends up in the total of our national debt.