The U.S. publicly held debt has ballooned by over 50% under President Obama to now approach almost $13 trillion. With no signs of slowing, a debt this monstrous will have disastrous effects upon the growth of our country.
When Barack Obama took office on January 20, 2009, the publicly held debt stood at $6.307 trillion. Contrasting a presidency of lows, Obama grew the publicly held debt to a record high of $12.922 trillion this week. How could Obama have reached such an historic level, accomplished so much change, and harmed America’s future so dramatically in just under six years?
Federal debt held by the public currently stands at about 74% of GDP. This is the highest it has been since the end of WWII. Debt was as low as 35% of GDP as recently as 2007. The CBO projects debt as a percent of GDP will rise to 77% by 2024. This prolonged high level of debt is unhealthy for the U.S. economy.
There are two sides to the issue of government debt: spending and taxation. Debt increases when the government spends more than it takes in. Historically, federal revenues are about 18% of GDP, while federal spending is about 20.5% of GDP. Under Obama, revenue has been steady around 18%. Although taxes could always be lower, lack of revenue is not what is driving the debt problem. Rather, outlays as a percentage of GDP have begun to drift past 21% towards 22%. Furthermore, the CBO projects spending rates to increase past 30% by 2062 and past 36% by 2089. Clearly, we have a spending problem, not a revenue problem, when it comes to solving the debt situation. U.S. debt is at a record high due to Obama’s spending problem.
The Obama legacy will be defined by crippling our economy through more than doubling our nation’s debt. A failure to see the devastating effects of out of control spending and stifling taxation will hurt our country for decades to come.