Deficits, though, don’t tell much about the country’s total indebtedness because they only represent a one-year comparison of revenues and spending.
While annual deficits are declining, the national debt — the accumulation of deficits going back to the days of George Washington — is still rising. It stood at $10.6 trillion the day Obama took office. It’s now $16.7 trillion, according to the Treasury Department’s Bureau of the Public Debt.
Thus, the national debt has increased by $6.1 trillion under Obama — the largest increase to date under any president, and a reflection in part of the deep recession early in his first term. The next highest was the $4.9 trillion added to the debt during the eight-year presidency of George W. Bush. Despite shrinking deficits, the debt is still rising because the U.S. government still must borrow 19 cents of every dollar it spends.
OBAMA: “Raising the debt ceiling is not the same as approving more spending, any more than making your monthly payments adds to the total cost of your truck. You don’t say, ‘Well, I’m not gonna — I’m not gonna pay my bill, my note for my truck because I’m gonna save money.’ No, you’re not saving money. You already bought the truck, right? ... So raising the debt ceiling, it doesn’t cost a dime. It does not add a penny to our deficits. “ — Speech at Ford plant.
THE FACTS: Raising the debt ceiling is not the same as a consumer merely making monthly payments on existing debt. It’s very much like a consumer getting approved for a higher cap on a credit card. It doesn’t mean the consumer will necessarily spend more, but it makes higher spending possible.
In the government’s case, it has to have a higher credit limit so it can keep borrowing to make necessary payments. Borrowing to pay interest on existing debt as well as the bills is a recipe for deep trouble for consumers. But governments don’t — and really, can’t — handle their budgets as typical households do, despite the kitchen-table analogies that politicians in both parties love to make.