Call for Peace

بسم اللہ الرحمٰن الرحیم

 

In the Name of Allah,

the Most Gracious, and the Most Merciful

Politics

United States of America

 

Total USA Federal Govt. Debt

Total US federal government debt breached $30 trillion mark for the first time in history in February 2022.[6] As of December 2023, total federal debt was $33.1 trillion; $26.5 trillion held by the public and $12.1 trillion in intragovernmental debt.[7] In February 2024, the total federal government debt grew to $34.4 trillion after having grown by approximately $1 trillion in both of two separate 100-day periods since the previous June.[8] The annualized cost of servicing this debt was $726 billion in July 2023, which accounted for 14% of the total federal spending.[9] In December 2021, debt held by the public was estimated at 96.19% of GDP, and approximately 33% of this public debt was owned by foreigners (government and private).[10] The United States has the largest external debt in the world. The total number of U.S. Treasury securities held by foreign entities in December 2021 was $7.7 trillion, up from $7.1 trillion in December 2020.[11]

During the COVID-19 pandemic, the federal government spent trillions in virus aid and economic relief. The Congressional Budget Office (CBO) estimated that the budget deficit for fiscal year 2020 would increase to $3.3 trillion or 16% GDP, more than triple that of 2019 and the largest as % GDP since 1945.[12]

History

Main article: History of the United States public debt

The United States federal government has continuously had a fluctuating public debt since its formation in 1789, except for about a year during 1835–1836, a period in which the nation, during the presidency of Andrew Jackson, completely paid the national debt. To allow comparisons over the years, public debt is often expressed as a ratio to GDP. The United States public debt as a percentage of GDP reached its highest level during Harry Truman‘s first presidential term, during and after World War II. Public debt as a percentage of GDP fell rapidly in the post-World War II period and reached a low in 1974 under Richard Nixon. Debt as a share of GDP has consistently increased since then, except during the presidencies of Jimmy Carter and Bill Clinton.

Public debt rose sharply during the 1980s, as Ronald Reagan negotiated with Congress to cut tax rates and increase military spending. It fell during the 1990s because of decreased military spending, increased taxes and the 1990s boom. Public debt rose sharply during George W. Bush’s presidency and in the wake of the 2007–2008 financial crisis, with resulting significant tax revenue declines and spending increases, such as the Emergency Economic Stabilization Act of 2008 and the American Recovery and Reinvestment Act of 2009.[13]

In their September 2018 monthly report published on October 5 and based on data from the Treasury Department’s “Daily Treasury Statements” (DTS), the Congressional Budget Office (CBO) wrote that the federal budget deficit was c.$782 billion for the fiscal year 2018—which runs from October 2017 through September 2018. This is $116 billion more than in FY2017.[14]: 1  The Treasury statements as summarized by in the CBO report that corporate taxes for 2017 and 2018 declined by $92 billion representing a drop of 31%. The CBO added that “about half of the decline … occurred since June” when some of the provisions of the Tax Cuts and Jobs Act of 2017 took effect, which included the “new lower corporate tax rate and the expanded ability to immediately deduct the full value of equipment purchases”. (~$1.6 trillion in 2023)[14]

According to articles in The Wall Street Journal[15] and Business Insider,[16][15][17] based on documents released on October 29, 2018, by the Treasury Department,[18] the department’s projection[16] estimated that by the fourth quarter of the FY2018, it would have issued c. $1.338 trillion (~$1.6 trillion in 2023) in debt. This would have been the highest debt issuance since 2010, when it reached $1.586 trillion (~$2.16 trillion in 2023). The Treasury anticipated that the total “net marketable debt”—net marketable securities—issued in the fourth quarter would reach $425 billion; which would raise the 2018 “total debt issuance” to over a trillion dollars of new debt, representing a “146% jump from 2017”.[16] According to the Journal that is the highest fourth quarter issuance “since 2008, at the height of the financial crisis.”[15] As cited by the Journal and the Business Insider, the primary drivers of new debt issuance are “stagnant”, “sluggish tax revenues”, a decrease in “corporate tax revenue”,[16] due to the GOP Tax Cuts and Jobs Act of 2017,[15] the “bipartisan budget agreement”, and “higher government spending

 

 As of July 20, 2020, debt held by the public was $20.57 trillion, and intragovernmental holdings were $5.94 trillion, for a total of $26.51 trillion.^[19] Debt held by the public was approximately 77% of GDP in 2017, ranked 43rd highest out of 207 countries.^[20] The CBO forecast in April 2018 that the ratio will rise to nearly 100% by 2028, perhaps higher if current policies are extended beyond their scheduled expiration date.^[21]

The national debt can also be classified into marketable or non-marketable securities. Most of the marketable securities are Treasury notes, bills, and bonds held by investors and governments globally. The non-marketable securities are mainly the “government account series” owed to certain government trust funds such as the Social Security Trust Fund, which represented $2.82 trillion (~$3.45 trillion in 2023) in 2017.^[22]

The non-marketable securities represent amounts owed to program beneficiaries. For example, in the cash upon receipt but spent for
other purposes.^{[sentence fragment]} If the government continues to run deficits in other parts of the budget, the government will have to issue debt held by the public to fund the Social Security Trust Fund, in effect exchanging one type of debt for the other.^{[23][failed verification][dubious – discuss]} Other large intragovernmental holders include the Federal Housing Administration, the Federal Savings and Loan Corporation’s Resolution Fund and the Federal Hospital Insurance Trust Fund (Medicare).^{[citation needed]}

 

Domestic policy

Economy

Main article: Economic policy of the Donald Trump administration

Trump took office at the height of the longest economic expansion in American history,^[210] which began in 2009 and continued until February 2020, when the COVID-19 recession began.^[211]

In December 2017, Trump signed the Tax Cuts and Jobs Act of 2017 passed by Congress without Democratic votes.^[relevant?] It reduced tax rates for businesses and individuals, with business tax cuts to be permanent and individual tax cuts set to expire after 2025,^{[importance?]} and set the penalty associated with the Affordable Care Act‘s individual mandate to $0.^[212][213] The Trump administration claimed that the act would not decrease government revenue, but 2018 revenues were 7.6 percent lower than projected.^[214]

Despite a campaign promise to eliminate the national debt in eight years, Trump approved large increases in government spending and the 2017 tax cut. As a result, the federal budget deficit increased by almost 50 percent, to nearly $1 trillion in 2019.^[215] Under Trump, the U.S. national debt increased by 39 percent, reaching $27.75 trillion by the end of his term, and the U.S. debt-to-GDP ratio hit a post-World War II high.^[216] Trump also failed to deliver the $1 trillion infrastructure spending plan on which he had campaigned.^[217]

**********************

George
HW Bush was fiscally responsible – unlike Donald Trump

This article is more than 5 years old

Jeffrey Frankel

The late president tried to tackle the budget deficit by
doing a deal with Democrats to raise taxes

 

After a year and a half in office, Bush decided to address the long-postponed deficit problem that he had inherited. He entered into difficult negotiations with the congressional leadership. The Democrats controlled both houses of Congress and refused to agree to restrain domestic spending unless taxes also contributed to fiscal consolidation. Thus, in June 1990, Bush admitted that any agreement to cut the deficit would require tax increases.

The Budget Enforcement Act of 1990 legislated caps oniscretionary spending and created constraints known as “pay-as-you-go” (paygo) rules: if Congress wanted to cut a tax or increase entitlement spending it had to pay for the cost in some other part of the budget. When Bill Clinton became president in January 1993, he sent legislation to Congress to renew the system of spending caps and paygo. It passed, though without a single Republican vote.

The fiscal system instituted by Bush remained in place throughout the remainder of    Clinton’s eight-year presidency. Tight budget policy, together with strong economic growth, steadily reduced the deficit and converted it to rising surpluses in 1998, 1999 and 2000. But in January 2001, after Bush’s son, George W. Bush, assumed office, the Republicans allowed the budget caps and paygo rule to lapse. They cut taxes and raised spending rapidly, resulting in the return of record deficits.

***************************

Clinton inherited major budget deficits left over from the Reagan and Bush administrations; fiscal year 1992 had seen a $290 billion deficit. In order to cut the deficit, Bentsen, Panetta,and Rubin urged Clinton to pursue both tax increases and spending cuts.

He had budget surpluses for fiscal years 1998–2001, the only such years from 1970 to 2023. Clinton’s final four budgets were balanced budgets with surpluses, beginning with the 1997 budget. The ratio of debt held by the public to GDP, a primary measure of U.S. federal debt, fell from 47.8% in 1993 to 33.6% by 2000.

Clinton’s second term also saw the first federal budget surpluses since the 1960s. Clinton’s budget surplus was reversed by the overspending of George W. Bush, which led to the current $33 trillion in national debt. The ratio of debt held by the public to GDP, also fell from 47.8% in 1993 to 33.6% by 2000. His impeachment in 1998 arose after he denied claims of having an affair with a White House intern, Monica Lewinsky under oath. He was acquitted of all charges by the Senate. He appointed Ruth Bader Ginsburg and Stephen Breyer to the U.S. Supreme Court.

 

In short, President Bush came into office with the budget projected to produce surpluses of $5.6 trillion over ten years (2002-2011) if he simply maintained its course. But he changed course dramatically, and when President Obama took office, that course had the budget headed toward deficits of $10.6 trillion over ten years (2010-2019). (See the box on page 3 for a discussion of why the Bush policies will add substantially more to deficits and debt in 2009-2016 than they did in 2001-2008, a point essential to any comparison of the effects of the Bush and Obama fiscal policies.)

Steny 
Hoyer says George W. Bush inherited $5.6 trillion …

 

PolitiFact

https://www.politifact.com › factchecks › jun › steny-h…

 

2 Jun 2011 — $11-plus trillion debt when George Bush left office.” House Minority Whip Steny Hoyer, D-Md., said on MSNBC’s “Daily Rundown” that George W

President Barack Obama’s tax, spending and deficit legacy has long been subject to intense debate. Many liberals portray a president who inherited a daunting $1.2 trillion budget deficit and eventually cut it in half, despite a sluggish economy. They assert that he responsibly raised tax rates on upper-income Americans, expanded health care spending and trimmed the defense budget.

 

Using Treasury Department data, the total public debt, which includes intragovernmental holdings and public debt, increased by approximately $7.8 trillion from the start of Trump’s presidency on Jan. 20, 2017, to when he left office on Jan. 19, 2021. Under Obama, however, the public debt increased by about $9.3 trillion from when he was inaugurated on Jan. 20, 2009, to when he left office on Jan. 19, 2017.

Weeks later, COVID-19 erupted and made the financial situation far worse. As of Dec. 31, 2020, the national debt had jumped to $27.75 trillion, up 39% from $19.95 trillion when Trump was sworn in. The government ended its 2020 fiscal year with the portion of the national debt owed to investors, the metric favoured by the CBO, at around 100% of GDP. The CBO had predicted less than a year earlier that it would take until 2030 to reach that approximate level of debt. Including the trillions owed to various governmental trust funds, the total debt is now about 130% of GDP.

 

Call for Peace

Messages to Look for Peace

PS:

Sponsorship

Brothers and Sisters!  Please read the Post: Sponsorship in the Navigation Bar as to why it is needed to keep conveying the Messages to Look for Peace until the Day of Resurrection and how it will be expended until the Day of Resurrection.

Wass’a’lam