U.S. National Debt in Dollars And As Percent of GDP

Bill Clinton signed the largest deficit-cutting plan in history saving more than $1 trillion over a seven year period. Bill Clinton’s economic plan passed in August of 1993 was designed to return the country back to fiscal responsibility and balanced budgets. Not one Republican voted to support the balanced budget package in the Senate. The only reason it passed was because Al Gore broke the 50-50 tie in the Senate by casting his vote in support of the bill as the Vice-President. Through the Clinton administration the country saw the largest economic growth in U.S. history.

When George Bush took office Republicans abandoned the principles laid out for deficit reduction during the Clinton administration. 24 of the current Republican Senators still in office voted to expand Medicare in 2003 in order to provide prescription drug benefits to seniors. This was a win to help buy votes from a core group of seniors. The votes also provided a gain for the drug industry to increase their profits. Democrats objected to this expansion because the spending was not offset by taxes or spending cuts and because smarter legislation would have been able to reduce the cost of prescription drugs through drug importation from Canada without increasing government spending. The Republican expansion cost approximately $500 billion to $800 billion over a 10 year period. This spending was added directly to the deficit. These same Republicans are now opposed to the current health care legislation being passed even though it’s completely paid for by spending cuts and tax increases. The current health care bills cost about the same as the Republican expansion of the prescription drug progam, but it provides near universal health care to all Americans instead of a single ineffective program. The current health care legislation being proposed by Democrats actually reduces the deficit by $132 billion over ten years and nearly $1 trillion dollars by the end of the second decade after it is enacted. This type of program should be applauded by anyone concerned with our debt.

George Bush left a legacy ignoring fiscal responsibility and returned to spending money that we needed to borrow from other countries like China. The deficit in 2009 reached $482 billion, which does not even include the $80 billion that Republicans needed to pay for their war costs. Republicans wanted the debt to appear lower than what it actually was so they did not include war costs in their budget estimates. Why did conservatives not enact PayGo legislation that Democrats are in favor of that would require the government to offset any new spending increases with tax increases or spending cuts? We paid for the Bush tax cuts by adding that money to the national debt. Where were conservatives when George Bush implemented his huge tax cuts to millionaires without providing a way to pay for them? Where were the conservatives raising people’s fears about the size of the deficit during the Bush administration when they had the most power to do something about it? It’s politically difficult to raise taxes on anything when it’s needed.

Conservatives historically don’t care if they are adding to the deficit, but when a Democratic administration is elected somehow it’s a big concern of theirs. The bail outs and the other economic programs were started by a conservative administration, but yet they blame Obama for these programs. Do conservatives think Obama wanted to bail out banks trying to bring the economy back from the brink of collapse? The reason the economy was in dire trouble was because of the conservative principles of deregulation and fiscal irresponsibility that led to the housing and credit crisis. Obama and the Democrats needed to step in and fix the issue and because of these policies the economy appears to have turned around. The first key priority of the Obama administration that we can judge his fiscal responsibility when it comes to the debt and spending are the current health care bills, which are deficit neutral.

U.S. National Debt As Percent of GDP

The fact is the national debt and deficit numbers look large because the U.S. economy is large. Economists believe the best number to look at is the percentage of the debt to GDP and the current debt under Obama is only 2 to 3 percent of our GDP which is equivalent to what we had when Reagan and the first Bush left office and before Clinton was able to rein in the debt numbers. Should we be concerned about our debt? Yes. But are things as dire as conservatives would hope everyone believes? No.  You can see that the Reagan and Bush administrations added more to the national debt in recent history than Democratic administrations when the percentage actually decreased.