The Obama Record: The Debt

 

The second in my ongoing series on the Obama record as President, the first part of which may be read here,  leading up to the election in November.  Few things show more graphically the disaster of the Obama presidency than the debt he has piled on this nation.  This week the Obama Debt reached a grim milestone, as he surpassed the debt run up by his predecessor George W. Bush in eight years.  That right-wing news organization CBS News, gives us the forbidding numbers:

(CBS News) The National Debt has now increased more during President Obama’s three years and two months in office than it did during 8 years of the George W. Bush presidency.

 The Debt rose $4.899 trillion during the two terms of the Bush presidency. It has now gone up $4.939 trillion since President Obama took office.

 The latest posting from the Bureau of Public Debt at the Treasury Department shows the National Debt now stands at $15.566 trillion. It was $10.626 trillion on President Bush’s last day in office, which coincided with President Obama’s first day.

 The National Debt also now exceeds 100% of the nation’s Gross Domestic Product, the total value of goods and services.

Mr. Obama has been quick to blame his predecessor for the soaring Debt, saying Mr. Bush paid for two wars and a Medicare prescription drug program with borrowed funds.

 The federal budget sent to Congress last month by Mr. Obama, projects the National Debt will continue to rise as far as the eye can see. The budget shows the Debt hitting $16.3 trillion in 2012, $17.5 trillion in 2013 and $25.9 trillion in 2022.

Of all the harm that Obama has done to the American Republic, I believe his acceleration of the process that will end ultimately in some form of national debt repudiation will be the one that future historians will point to as the most significant.

 

 

 

7 Responses to The Obama Record: The Debt

  • They can refund the public debt. The debt needs to be paid in cash (from taxes) is the trillions in the Social Security and Medicare Trust Funds. And, add loan guaranties at FNM/FRE and student loans.

  • Obama took all of our money in the first one hundred days. Obama took our private property with Rural Councils. Obama is taking out FREEDOM with Obamacare. Obama’s game plan is the guilt trip. The problem is always the citizenry’s fault. Citizens with unresolved deep seated guilt are being played like a violin or maybe a harp. (Citizens are being used and abused) Let us set aside our personal and communal guilt, take back our money, our property and our freedom.

  • Of all the harm that Obama has done to the American Republic, I believe his acceleration of the process that will end ultimately in some form of national debt repudiation will be the one that future historians will point to as the most significant.

    You could refer to “the harm Obama has done”, but what has been notable about the current incumbent is his concession of the initiative to the Democratic congressional caucus. What you get with B.O. is the resultant of all the various vectors operating withing the Democratic Party, or, put another way, the default Democratic position. The President’s disregard of the work of Erskine Bowles, Alice Rivlin et al one might wager is the most consequential (non)-decision he has made. Then you remember, the U.S. Senate, under the direction of the chairman of its majority caucus, has not passed a budget in three years. The criminal negligence doesn’t go all the way down (state governments balance their budgets), but it the central government is so steeped in it that a minimum condition of addressing any problems is an electoral shellacking for the Democratic Party of a sort that has not been delivered in 60 years or more.

  • I agree with every word you typed Art.

  • As an “average” joe with a non-finance degree all of this is quite frightening.

    I read somewhere that much of this debt is owed to people like myself who own large amounts of government bonds (US citizens).

    does anyone know if this is true?

    And if so, am I screwed or am I going to get a larger return on my investment?

    I am somewhat afraid of the anwers I might get….

  • Once upon a time, President Andrew Jackson actually paid of ALL of the national debt.

  • Chris,

    If you have been paying “payroll taxes” (one of the big lies: this is Federal Insurance Contributions), you “own” a small piece of a huge chunk of the national debt.

    I’m kind’a in the finance business.

    US government debt obligations basically have zero credit, or default, risk. That means you don’t need to be concerned whether the US can pay you back.

    There are many other risks. Interest rate (usually a problems in banks) and market risks: The market value of fixed-rate bonds/debt instruments falls as market interest rates rise and vice versa. Say, you purchased for $1,000 a 30-year T Bond paying 3.5% (We are now in a historically low rate environment). If market rates risk to normal levels, say 6%, for 30-year T’s, and you must sell, you will incur a loss of say 20%. If you hold on you could be earning 6%. Then that would be an opportunity cost/loss.

    A concomitant risk is you would be losing purchasing power with your 3.5% yield.

    The regime’s regulatory and tax policies, including Obamacare, make it more difficult for the evil, unjust private economy to grow (and so tax revenue growth will be retarded) enough to repay the debt. Then, the debt may need to be repaid with the cruelest tax of all: inflation. Again, inflation, market interest rates rise and fixed rate debt instrument prices fall (see above) like rocks.

    Finance 101: diversify.

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