this article "the national debt graph by president" that explains how the debt got where it is

[saturnsring]

according to the writer -

So we will ask, “What if Reagan and the Bushes had balanced their own budgets?” And what if Clinton and Obama had taxed the same and spent the same as they actually did?

The answer is that the National Debt would now be lower by $13.5 trillion! So that’s the Republican National Debt — according to their own standard of balanced budgets.

It’s quite easy to check these calculations (see this spreadsheet). They go like this: When Reagan took office the debt was $1 trillion. When he left it was $2.86 trillion. So $1.86 trillion for him. Then Bush-I added $1.55 trillion. Total so far: $3.4 trillion. Then Clinton took over.

Now the national debt is like a mortgage, and so the bigger it is, the more interest must be paid on it. Without the extra Reagan-Bush $3.4 trillion, there would have been a few hundred billion less in interest on the debt every year under Clinton. That interest adds another $2.3 trillion to the Reagan-Bush debt. Then Bush II increased it by $6.1 trillion to $11.8 trillion. And interest on that has been increasing the debt under Obama. The total Reagan-Bushes debt is now $13.5 trillion.





http://zfacts.com/p/318.html

there's more at the link --

[Make7]

1. But what about that huge spike in debt by Woodrow Wilson II. ( n/t )

[font style="color:#ffffff; background-color:#ffffff;"]Yes, this is a joke.[/font]

[Wounded Bear]

7. Should I assume that was intentional?

[1939]

2. A little bit oversimplified

Three things affect the size of the deficit and the growth in the national debt.:

1. Government spending

2. Tax receipts which are a function of both tax rates and taxable income generated

3. Inflation because runaway inflation (as occurred in the 1970s) trivializes the existing government debt

The big downturn in the Clinton years was largely of function of the massive capital gains generated by the stock market and the resultant taxable income spike. The initial surge in the W years was caused by a perfect storm of dotcom bust, Enron scandal, and 9-11 wiping out capital gains.

The Reagan-Bush I years and the Bush II-Obama years are times of very low inflation. Variations in taxable income (especially capital gains) seem to have more influence in the chart than do tax rates. Reagan tax cuts and Bush II tax cuts actually caused a leveling off of the growth in debt.

[saturnsring]

3. thanks i was looking for this kind of feedback

[ProfessorGAC]

4. There Is Something Oversimplified Here

And i don't think it's the OP

[1939]

5. Well, professor

Large surges in the current deficit normally occur when tax receipts go down. Tax receipt variation is normally caused by two things, strength of the economy in terms of employment and capital gains.

Look at a graph of income of the top 1% over time or of income inequality over time. Both spike in times of great capital gains and both crater in times of capital losses.

If we had three or four years of virulent inflation like 25% a year, the national debt would be trivialized as compared to GDP because the national debt would then be denominated in cheaper dollars.

[Jim Lane]

6. The analysis overstates the difference

I think it's very useful to point out that, in practice, Republican fiscal policy consists of running huge deficits while making impassioned speeches about the importance of a balanced budget. This graph makes the point well.

Nevertheless, there's at least one important oversimplification. The graph presents the total debt as a percentage of GDP. That's why, for the 1981-1993 period, the line goes down even on the assumption of balanced budgets. Each year's deficit is zero, GDP goes up, so total debt as a percentage of GDP goes down.

The problem is that GDP went up during those years partly because of the stimulative effect of the Reagan-Bush deficits. Reagan's economic policy was referred to as "military Keynesianism". Pouring money into an already bloated military budget doesn't have as much of a stimulative effect as would better-targeted approaches, such as extended unemployment compensation, but it does help to some extent. The same is true of tax cuts for the rich.

With balanced budgets during those 12 Republican years, GDP growth would have been much less. Debt as a percentage of GDP would have declined, but much more gradually.