PrintMay 2, 2011
Obama's Hockey Stick: The Federal Debt
The national debt is calculated in two ways: gross debt and net debt. Net debt is primarily gross debt net of the various government "trust funds" the largest of which is Social Security.To start, let's look at gross federal debt:The orange vertical line is at 2008, the last year of the Bush (43) Administration. As the reader no doubt expected, there is a hockey stick effect in the last three years, where the Federal debt grows at about twice the rate of the previous decades. In the three years from 2008 to 2011, gross federal debt grew by 55% from $10.0 trillion to an estimated $15.5 trillion.We can get a better look at the strain this puts on the country's future by looking at gross federal debt as a percent of GDP:In the last year of the Bush (43) Administration, at the orange line, gross federal debt / GDP was approximately 70%, a record high for the period shown up to that time, but since then this figure has surged to an estimated 103% at the end of...(Read Full Article)
