the us national debt in 2013: a fresh start

7/29/2019 The US National Debt in 2013: A Fresh Start

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The US National Debt in 2013

Source of info complied below

http://www.treasurydirect.gov/NP/BPDLogin?application=np

Figure 1: The growth in the US National Debt since Jan 1835 when the debt wasactually $0, when Andrew Jackson (see $20 bill) was President. The table below

gives the values obtained from the Bureau of Public Debt.

0

2

4

6

8

10

12

14

16

18

1800 1850 1900 1950 2000 2050

Time, t [Year]

Nation

alDebt,D[$Trillions]
http://www.treasurydirect.gov/NP/BPDLogin?application=nphttp://www.treasurydirect.gov/NP/BPDLogin?application=nphttp://www.treasurydirect.gov/NP/BPDLogin?application=np


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Table 1: The Growth of the US National Debt

Year National Debt

$ Trillions

1835 0

1863 0.001

1943 0.1

1982 1.142

1992 4.064

20015.807

2009 10.627

2013 16.433

On Jan 22, 2013, $16,432,571,159,411.57 = $16.433T (Obama's 2nd term begins)

On Jan 20, 2009, $10,626,877,048,913.08 = $10.627 T (Obama's takes office)

On Jan 22, 2001 $5,728,195,796,181.57 George Bush Presidency starts

Historical Debt Growth Data

On Jan 01, 1835, $33,733.05 (became $0 during this week and started rising)

On July 01, 1863 $1,119,772,138.63 Crosses $1 billion mark (Civil War era)

On Jun, 30, 1943 $136,696,090,329.90 Crosses $100 B (WWII era)

On Sep 30, 1982, $1,142,034,000,000.00 Crosses $ 1T (Reagan Presidency)

On Sep 30, 1992 $4,064,620,655,521.66 Crosses $4T (Senior Bush Presidency)

On Sep 30, 2001 $5,807,463,412,200.06 Bush-II 1st term started on Jan 20, 01


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The national debt crossed the $1T mark in 1982 during Reagan's first term,

quadrupled and crossed $4T in 1992, during the Senior Bush presidency and then

quadrupled again and crossed $16T in Sep 2012 during the Obama first term.

You can see here the national debt quadrupled from $1T to $4T (with RepublicanPresidents in office) and was $10.63 T when the junior George Bush left office.

Thus, we have added nearly $6T (now at $16.43T) during the Obama first term.

Just think about it. The debt climbed to $10.63T between 1835 to 2009, or 174

years. It took only 4 more years to add $6T to the debt, or an average of about

$1.5T per year. At this rate when Obama leaves office in 2016 the debt will be

greater than $22T.

While this is surely alarming, let us also remember that the sky has not fallen. The

US is still solvent, although in severe crisis mode. But, did it ever occur to anyone

that, perhaps, this "crisis" is NOT half as bad as the Republicans want us to believe

it is?

How did the US manage to finance $1.5 T per year since Obama took office? This

was done by "borrowing". From whom? Study carefully who is holding the US

national debt.

Your bank holds your personal debt. When the bank asks you to pay up, you have

to pay. As long as monthly payments are made, banks usually will NOT call the

debt.

The same goes with the US National Debt. Until the creditors ask the US to pay

up, all we have to do is keep paying the interest on the debt (which is several

billions per month). But, no creditor is going to risk asking the US to pay up. Why?

The risk is outright war with the US. The US can default. The consequences will

be felt globally. So, this will NEVER happen.

It is just an empty threat held by racist and extremist elements of the RepublicanParty. It is time to IGNORE them and move forward with a unified vision to

restore the country's prosperity. President Obama is to be commended for his

brilliant (second) inaugural address, although now already being critiqued by the

Republican extremists (hey, even Eric Cantor and Newt Gingrich found nothing


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wrong with the Presidents vision) and extra-governmental shrills like the NRA, as

being too partisan.

So, let us get past all this "fake" crisis and concentrate on how to grow the

economy and spend the money approved wisely to create jobs. Once people areemployed, they will pay taxes and government receipts will automatically increase.

Businesses will boom, since jobs equals spending power for millions of

individuals.

Let us make sure that our tax laws ensure that businesses (especially large

businesses) pay their fair share of taxes and eliminate all the loopholes. Let us also

make sure that the rich pay their fair share, like it was done during World War I

(President Wilson, top marginal tax rate was 77%, today it is 39.6%, what it was

under Clinton) and during World War II (President FDR, top marginal tax rate was94%). Both Democrats and Republicans agreed to raise the top tax rate to these

astronomical levels to finance these earlier wars. The US ran huge deficits during

those years; see link below for the tax rates data.

http://www.taxpolicycenter.org/taxfacts/Content/PDF/toprate_historical.pdf

The top tax rate was 91% when President Kennedy took office and was reduced to

77% by 1964 (after his assassination). It was 69.13% when President Reagan took

office. It was President Reagan who famously said during his first inauguration,"Government is the problem." Later, he said, "We do not have a trillion dollar debt

because we are not taxed enough. We have a trillion dollar debt because we are

spending too much." (This is not an exact quote, but the gist of it.)

This mantra of government spending gone out of control took hold and the top

marginal tax rate was reduced to 28% using misleading pseudo-theoretical

arguments of a maximum point on the graph of government receipts versus the tax

rate (the Laffer curve). The argument was deceptive and simple: if the tax rate is

0%, government receipts will go to zero. If the tax rate is 100%, again governmentreceipts will go to zero. So, there must a be maximum point on the graph with

increasing tax rate, may be at tax rate of 50%, if we assume that the graph is a

simple, symmetric parabolic curve (see photo). So, if we assume that we are past

the maximum point, reducing the tax rate will actually increase government

receipts (see arrow in the photo), the deficits will go down and the economy will
http://www.taxpolicycenter.org/taxfacts/Content/PDF/toprate_historical.pdfhttp://www.taxpolicycenter.org/taxfacts/Content/PDF/toprate_historical.pdfhttp://www.taxpolicycenter.org/taxfacts/Content/PDF/toprate_historical.pdf


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boom since all the rich folks who got their tax cuts will invest their money and

create jobs.

Well, it all seemed like a good idea at that time, especially after the dismal Carter

years. Now we have "REAL DATA" regarding the effects of this Reaganism, orsupply side economics, as it was called. The fake argument about booming

government receipts with reduced top tax rates defies the historical evidence of

what happened in the USA during the two world wars. Amazingly, no economist

worth his salt even dared to speak up and point out the effects of increasing the top

tax rate to nearly 100%. Under President Bush (junior), the US entered into two

wars, Iraq and Afghanistan, without increasing the top tax rates to finance the wars

and reduce the deficit. Instead, junior President Bush pushed for a tax cut and the

Democrats simply caved in.

Now, we have REAL DATA regarding the effects of Reaganism and supply side

economics. The US economy simply tanked in 2008, before the Presidential

election. We do NOT need to know all the reasonsthe high and mighty academic

reasons - as to why this happened. Just look the BIG picture above and the

decisions made by Republican Presidents who got us from $1T to $10.63T of debt.

We need a FRESH START now. But, it cannot be based on the fake premises of

the Reagan-Bush I-Bush II eras.

I say, let the debt rise to $22T or even $25T. But, let us demand that both

Republicans and Democrats co-operate and work with the President and pass the

annual budgets without the divisiveness and political brinksmanship. There are

many wise ways to spend $3.5T or even $5T each year by investing in programs

what will grow the economy in the long run.

The urgent need of the WAS and IS ---- JOBS.

Let us get the millions who are now unemployed and eager to return to the

workforce back to work. Let us work towards a comprehensive tax reform, a fair

and simple tax code that will, and cannot, be "tinkered" with on an annual basis.

Let us take the power spending away from the legislative branch, at least

temporarily, and let the President define the budget and his/her (the next President

might just be a woman) vision for the country and set the priorities. The House and


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Senate should simply approve the budget submitted with minimal debate (and

constructive suggestions for improvement).

We will all be better off in the long run. God Bless America.

Figure 2: Schematic illustration of the Laffer curve which became the theoretical

centerpiece of Reaganomics and supply side economics of the 1980s the disastrous

effects of which endure to this day with out of control budget deficits and a

national debt that has mushroomed to $16.433 T at the start of the Obama second

term. The national debt crossed the $1T mark in 1982 when Reagan was President

and the supply side experiment of increasing government receipts by cutting the

tax rate began.

0 10 20 30 40 50 60 70 80 90 100

Tax rate, T

GovernmentR

eceipts,

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the us national debt in 2013: a fresh start

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