The Next President’s Debt Burden
According to the Department of Commerce, U. S. gross domestic product increased at an annual rate of 1.2 percent in the second quarter of 2016. This, unfortunately, isn’t indicative of the sort of robust economic activity that will grow the economy out of debt. In fact, as growth is stagnating, deficits are increasing.
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The U. S. fiscal year 2015 budget deficit was about $439 billion. For fiscal year 2016, the federal government is projected to run a deficit of $616 billion. The upsurge, of roughly $177 billion, amounts to about a 40 percent deficit increase from 2015 to 2016.
Presently, the federal debt is well over 100 percent of GDP. Obviously, 1.2 percent GDP growth is wholly inadequate to shrink the debt. To the contrary, 1.2 percent GDP growth in the face of a projected $616 billion deficit will further increase the debt as a percentage of GDP.
As far as we can tell, neither Hillary Clinton nor Donald Trump is talking about the U. S. debt problem. What’s more, they’re economic platforms both include massive spending programs. The difference, of course, will be made up with debt. But how much debt can the next president really add?
George W. Bush doubled the federal debt from $5 trillion to $10 trillion. Barack Obama’s on target to double the federal debt from $10 trillion to $20 trillion. It is unlikely the next president will be able to double the debt from $20 trillion to $40 trillion.
This post was published at Acting-Man on August 8, 2016.
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