The Debt

Several family members have pointed out that I used to hold that the debt didn’t matter. They also point out I was saying this as recently as George W. Bush’s presidency. Was it because a Democrat was president that I now had a problem with the debt? Let’s ponder the history of US Debt.

During the Clinton administration, the Debt to GDP ratio fell from 65% to 56%.

During the Bush administration, the ratio climbed above 70% for the first time since the 50s.

During the Obama administration, it has broken 100% for the first time since WWII.

During WWII, the driver of our debt was fighting a world war. In 1941, the debt ratio stood at 45% and rocketed to 122% by 1946. However, when the war ended, government spending plummeted. By 1956, the debt ratio was down to 62%.

Entitlements are the driver of our debt today. Unlike WWII, they have no end date. There will be no post-war government shrinking as we saw in the 1940s.

Certain levels of debt are not a problem and for most of my life, the debt was within reasonable limits. That is no longer the case. Between Bush and Obama, we have added $10 trillion to our debt in just over a decade. I thought Bush was a big spender and Obama has outspent him in less than half the time. The debt is wildly out of control and is now cause for alarm, maybe even panic. Regardless of who wins this year’s presidential election, I will still have a problem with the debt. Until it is on a downward glide path, we should all be concerned.