Guest Post: Comparing the Debt Accumulated During Recent Presidencies
Author: Chris Blumberg
There have been a lot of debates and arguments over how much debt was created by President Obama lately so I've decided to show how they are all simply partisan in nature based on which side of the aisle each person is on. Depending on exactly how you measure debt, you can get a very different picture. There are four ways of measuring a president's performance when it comes to the budget and deficit:
The first way (the blue columns below) is to measure the increase in the debt, in current dollars, from inauguration date January 20th to January 19th at end of term. Conservative outlets frequently cite debt figured based on this approach.
The second way (red below) is from fiscal year October 1st to September 30th after end of term. The fiscal year begins eight months into the President's term in order to give Congress and the new president enough time to get settled and setup the committees, cabinet and secretaries in order to create a new budget. If the budget would not be set up this way, there would literally be a fiscal budget fight and possible government shutdown every time a new president entered office.
The third way (orange below) is to adjust the fiscal year figures to reflect inflation. Adjusting for inflation gives a more realistic picture of how much debt was actually accumulated. World War II created an enormous amount of debt, but if you do not adjust for inflation, it would appear to be a practically irrelevant blip in the federal debt.
The fourth way (green below), which economists generally prefer, is to adjust debt for GDP. This approach is sometimes used because our ability to pay the debt is driven largely by the size of our economy. You can see how all the Presidents after Eisenhower compare on this measure here
The debt totals for Presidents Clinton, Bush and Obama are depicted below according to each of these approaches.
The best way to measure a president in my personal opinion is by fiscal years and adjusted for inflation (the orange columns below) as the president doesn't generally have much power to change the current budget. However, some presidents have significantly altered the budget before the start of the fiscal year- most famously by FDR's "New Deal Congress" which passed a huge number of laws between March 8th and June 16th. FDR was inaugurated on March 4th and has since then set the standard for a president's first 100 days of presidency. The way you measured a president never really mattered until 2009's record deficit of $1.5 trillion and ever since it's been a huge debate. Just how much of a difference does this make? I've taken the data from the Treasury debt to the penny and made the graph below to show the different ways of measurement:
Sources: Treasury BEA | Data: Excel
As we can see from the graph if we were to measure Bush's debt against Obama's debt based on inauguration dates, without adjusting for inflation, the debt has risen $7.5 trillion during Obama's presidency, but only $4.9 trillion under Bush, meaning President Obama has added $2.6 trillion more to the debt. However, if you look at the fiscal year, the gap drops to $128 billion. If you also adjust for inflation, then President Bush added $225 billion more to the debt, and if you adjust for GDP, then President Bush added $1.4 trillion more to the debt. Ultimately it will be for you to decide how to measure a president's performance.
April 29, 2015