Fact Check: Did Obama reduce United States' federal debt?

Discussion in 'Politics' started by Guest, 14th Jan, 2019.

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  1. Guest

    Guest Guest

    Rather than take one of the existing threads further off track, I thought I would put this claim in a new thread:

    Here are the facts:

    upload_2019-1-14_8-6-53.png
    via Which President Increased U.S. Debt the Most?

    [​IMG]
    via [CHART] How the United States' Skyrocketing Debt Is Threatening Your Money

    Is anyone aware of any data which would suggest Obama reduced federal debt?

    That answer aside, what observations might suggest Obama was a better (or worse) manager of the federal budget (and US national debt) than Trump or other Presidents?

    He did takeover at a tumultuous time at the depths of the GFC, so perhaps some leniency for his spending could be attributed to that (in the early years).. but not in my opinion for some of the trillion+ dollar deficits in his later years.
     
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  2. Lizzie

    Lizzie Well-Known Member

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    Sorry - my bad - I confused dragging the USA out of the brink of bankruptcy for doing something good. If you look at the facts, yes, Obama did have a massive deficit at the start of his tenure due to wrangling the GFC, but managed to reduce it significantly by the time he left office

    What's Trump's excuse?

    Screenshot (705).png
     
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  3. turk

    turk Well-Known Member

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    You have also confused the deficit with the debt and the deficit and began to grow again.


    Debt and Deficits

    The federal debt more than doubled under Obama, and he left Trump a legacy of worsening deficits.


    Debt — On the day Obama left office, the U.S. government’s debt owed to the public was more than $14.4 trillion, an increase of more than 128 percent during his eight years.


    The debt also has grown dramatically even when measured as a percentage of the growing economy, from 52.3 percent of gross domestic product at the end of fiscal year 2009 to 77.0 percent as of the end of fiscal year 2016 on Sept. 30, 2016, according to historical budget figures from the Office of Management and Budget.


    Deficits — Under Obama, annual federal deficits fell, but then turned up again.


    The deficit hit $1.4 trillion in fiscal year 2009. As we’ve documented elsewhere, Obama inherited most of that deficit and signed spending measures that contributed as much as $203 billion to FY 2009’s red ink.


    After that, the yearly deficits declined markedly for several years. In fiscal year 2015, the deficit was $438 billion, a drop of 69 percent from FY 2009.


    But deficits were again on the rise as Obama left office. The nonpartisan Congressional Budget Office estimated in June 2017 that the deficit for FY 2017 — which ends Sept. 30 and is the last one for which Obama signed spending bills — will increase to $693 billion.


    CBO also projects that under current law, annual deficits will again exceed $1 trillion in 2022 and beyond. As things stand, federal debt owed to the public will reach 80 percent of GDP in 2020, and more than 91 percent in 2027, CBO projects.

    Obama's Final Numbers - FactCheck.org
     
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  4. Lizzie

    Lizzie Well-Known Member

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    Ah - you are right - my 15 year old commerce teen just schooled me on that ... still haven't answered tho. Obama dragged the USA back from the brink of bankruptcy - what is Trump's excuse?

    Screenshot (706).png
     
  5. turk

    turk Well-Known Member

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    You state you don't know debt from deficit, but you know that it was Obama that dragged the USA back from the brink of bankruptcy, could you please explain how he did this.

    Ask Trump.
     
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  6. Lizzie

    Lizzie Well-Known Member

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    At least I admit to mistakes (and yes, I do/did know the difference but made a slip).

    What would Trump know - his companies have been bankrupted 6 times - his companies have faced over 3,500 lawsuits for non-payment (and they're only the ones that could afford to apply a lawsuit). Don't confused the self created myth and public PR persona of Trump with who he really is.

    Wanna answer my question first?
     
    Last edited: 14th Jan, 2019
  7. turk

    turk Well-Known Member

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    I not the least bit confused, not a Trump fan at all.

    Also I'm not an economist and don't pretend to know, but I also thought you would like to explain how Obama saved the USA economy from bankruptcy.

    Referring to the chart, there are 3 spikes, all roughly the same % increase, 2 are during Obama's presidency, can you explain to me what they are about and why they are different from the one during Trump's time?
     
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  8. Guest

    Guest Guest

    Obama added more debt in 2016 than any of Trump's years so far or projected to 2021.

    That said I don't think each President is the sole (maybe not even the primary) driver of the United States debt and deficits.

    I am no expert on the intricacies of the system, but something I read on a blog some years back stuck with me.

    Effectively it explained the deficits are caused by a strong dollar as a result of outside investment / capital inflow (into US debt instruments, etc):

    [​IMG]

    via FOFOA: Global Stagnation (a VERY LONG, but interesting read)
     
    Last edited by a moderator: 14th Jan, 2019
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  9. Lizzie

    Lizzie Well-Known Member

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    Good to hear.

    As for the other ... imagine what he could have achieved with Senate that wasn't determined to block at every angle regardless ... go to the first listing for the Financial Times and have a read. Linking the actual page simply go to the generic from page of the FT how obama saved the us from the gfc - Google Search

    (you don't have to subscribe, just answer "no" to the question)
     
  10. geoffw

    geoffw Moderator Staff Member

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    There were several contributors to debt under Obama

    Defence spending - which should have been reduced
    The GFC - it took four years for income to reach pre GFC levels
    An aging population
    Increasing medical costs
    Bush's temporary tax cuts becoming permanent

    Obama had a hostile Congress for six years, so blame must be apportioned to them as well.

    The rate of increase had slowed by the end of his term, present indications are that it is increasing again

    Obama's increase per annum was less than those of Reagan or either Bush.

    Don't Blame Obama For Doubling The Federal Deficit
     
  11. Guest

    Guest Guest

    These are all likely to be issues faced by Trump also.

    Even if Trump decided he would aim to balance the budget I highly doubt he would get the cuts through congress. Which is why assigning blame to individual Presidents is nonsense.
     
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  12. geoffw

    geoffw Moderator Staff Member

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    Trump decreased taxes at a time when he had the support of both houses. It's an unusual move to decrease taxes when the economy is going well.

    Trump at least has one house on his side.

    He's made some positive moves towards decreasing pharmaceutical prices, but medical prices as a whole are far too high.

    Trade wars will not help. Apple sales in China have been very adversely affected.
     
    Last edited by a moderator: 10th Oct, 2021