Krugman on Obama's Deficits: Blame Reagan!

Paul Krugman puzzles over the surge in public and private deficit-spending and implausibly concludes that, "um, didn't something…happen around 1980? Can't quite remember…someone whose name begins with the letter 'R'?":

The turn to budget deficits was a direct result of the new, Irving-Kristol inspired political strategy of pushing tax cuts without worrying about the "accounting deficiencies of government."

More here.

For the record—and without letting Reagan off the hook for running budget deficits—here's some actual data.

Between 1950 and 1980, the federal government ran budget surpluses five (5) times. Between 1980 and 2009, the federal government ran budget surpluses…four (4) times. Even the Obama White House is not projecting a return to surpluses any time over the next decade. Indeed, separating out the colossal deficit of FY2009 (to which both Bush and Obama contributed mightily), Obama's smallest annual deficit over the next several years will be bigger than Bush's largest.

Krugman blames tax cuts for budget deficts, but total government receipts were $39.4 billion in 1950 and $2,524 billion in 2008 (in nominal terms, not adjusted for population growth or income), suggesting that, I don't know, spending might have something to do with persistent government deficits. 

Comments

[Warren]

Krugman blames tax cuts for budget deficts, but total government receipts were $39.4 billion in 1950 and $2,524 in 2008

Holy crap! We're in much more trouble than I thought! OTOH it's really impressive how far the government is able to stretch a couple grand.

[robc]

Nick,

What is the deal, why do I have to keep doing this to you - Between 1980 and 2009, there have been ZERO surpluses. Between 1950 and 1950 there were THREE.

The treasury dept has a web site listing total federal deficit at the end of each year. Use it.

Twice today. Fucking pisses me off.

[Diggs]

"Between 1950 and 1950 there were THREE (budget surpluses)."
Three budget surpluses between the exact same year? How does that work? Do you understand that a budget is for an entire year, or do you think it's a daily/weekly/monthly thing?

[Ben]

I agree completely. I am sick and tired of people referring to "surpluses" that occurred in years when the national debt went UP. We only had "surpluses" because we borrowed more money those years than we actually needed. That's like me spending my whole salary and running up debt on the credit car, and then running out and getting a cash advance from Visa so I can go home and tell my wife, "Look, honey -- We have money left over this month!" It's a total fraud.

[Ben]

D'oh -- "credit card," not car.

[Kevin]

I was beginning to think I'd get through the day without having to read anything by Krugman. Once again, thanks for sparing us a picture.

So does he write two or three columns a day? Are that many people interested in what he has to say, aside from those of us who mock him?

[Lamar]

"What is the deal, why do I have to keep doing this to you - Between 1980 and 2009, there have been ZERO surpluses. Between 1950 and 1950 there were THREE."

1950 must have been a hell of an orgy.

[swillfredo pareto]

total government receipts were $39.4 billion in 1950 and $2,524 in 2008 (in nominal terms, not adjusted for population growth or income)

As much as I wish that the federal government had $2,524 in receipts in 2008, I think you are missing a billion. Or a trillion depending on where you put the comma.

[Social Worker]

Where did Mister Krugman touch you? Show me on the doll where he touched you.

[robc]

Lamar,

I cant type when Im angry. Hulk smash keyboard, or something.

1950 to 1980.

[Tulpa]

Since you're mocking Krugman for implausible assertions, I think that $2524 figure counts as a joe'z law sighting.

[tim maguire]

You're all joking, right? It's obvious the $2524 figure is $2,524 billion.

[Attorney]

Silly me, hoping that Krugman would remember where he left his brain once a Democrat was in the White House.

[robc]

Before the details police try to correct me again (like in the last thread), I will point out here would I did there: If the Feds used GAAP, there hasnt been a year anywhere close to a surplus in a long time, including the late Clinton years.

[EJM]

Krugman is on Obama's official "enemies list"--or so the "Globe" reports.

[Jerry]

And who held a majority in the House of Representatives in 1980??

[Flex Nasty B.I.G.]

Social Worker wins the thread.

[Mike M.]

You would think that a genius, Nobel Prize winning economist like Paul Krugman would have managed to learn at some point during his life that the President can neither spend one penny of taxpayer money nor lower taxes by one cent without the approval of both houses of Congress first.

And by the way, if Ronald Reagan was so horrible, why did Krugman ever agree to work for the man?

[Johnny Longorso]

We elected RR in 1980, the Detriot Lions toed themselves to a winless season in 2008.

I blame Ronald Reagan. I blame RR for everything that happened since 1980. RR is clearly God himself.

[PapayaSF]

The figures in the PDF show something I noticed long ago, which I think small-government types could use to their advantage: federal government income in any given year meets or exceeds their total spending of about 2-3 years previous. So all we need to do is freeze spending for about three years and let income catch up, and the budget would be balanced.

Of course the left would scream about "cuts," but it seems like a relatively easy way to balance the budget.

[Pro Libertate]

Stop
Spending
So
Much
Fucking
Money
That
You
Don't
Even
Fucking
Have,
Please.

[Johnny Longtorso]

Like I keep saying, lets go back to Jimmy Carter and his Dem Congress's last compassionate budget, before the Reagan meataxe was taken to the govt.

[slutmonkey]

"If the Feds used GAAP"
Thanks for the naming caveat, I was puzzled.

[Attorney]

Pro Lib is losing it!

[Pro Libertate]

On this issue, I lost it long ago. If we ain't got it, don't spend it. I'm not even opposed to leveraged spending in theory, but the government has shown a willingness to commit what would be criminal fraud in the private sector in its accounting and reporting practices.

[Russ R.]

"Between 1980 and 2009, the federal government ran budget surpluses...four (4) times."

Not true.

Were it so, then by definition, there would have been four years when the national debt decreased.

I invite you to show me even one.

[Gene Berkman]

Government spending causes the deficits, not tax cuts. The Reagan/Kemp tax cuts did generate additional economic activity which led to higher tax receipts; the Fed expanding credit after Reagan took office along with the inflation escalator also led to higher tax receipts.

Reagan was not able to cut the welfare state as much as he promised, because there were not enough fiscal conservatives in Congress.

Reagan is responsible for the big deficits caused by his big run-up in military spending. But George W Bush expanded military spending after 9/11 - with many programs unrelated to fighting terrorism - by a much bigger factor than the Reagan expansion, and that is a major part of the continuing deficit, along with the increases in federal aid to law enforcement and education, and the bail-outs of the financial system.

[JW]

With lefties still telling Reagan jokes and saying his name with a look of smelling something bad, I should have realized by now that Reagan Derangement Syndrome is a debilitating, lifetime illness that doesn't respond to normal treatments.

Won't you please help us find a cure?

[z]

"Between 1980 and 2009, the federal government ran budget surpluses...four (4) times."

Not true.

Why are you guys beating around the bush instead of being all angry? If you count social security receipts then the government ran surpluses, if you don't, then they didn't.

[R C Dean]

suggesting that, I don't know, spending might have something to do with persistent government deficits.

I might be off a year or two, but I believe that we could be running at breakeven this year if we were spending at 2003 levels.

Or, what PapayaSF said.

[z]

Even the Obama White House is not projecting a return to surpluses any time over the next decade.

To be fair, Clinton didn't project surpluses until they started happening. The projections can be off by quite a bit.

[shrike]

Bush destroyed any semblance the GOP might have had as a "fiscally responsible" party by leaving an annual baseline deficit of more than $1 trillion.

Bush owns $4 trillion of Obama's future first-term debt if nothing changes.

But Obama is nothing if not lucky - we will experience a robust rebound in 2011-12.

I know - the aborto-freaks and rednecks will hate that.......

[FredP]

>Bush destroyed any semblance the GOP might have had as a "fiscally responsible" party by leaving an annual baseline deficit of more than $1 trillion.

Bush couldn't borrow or spend a dime without Congressional approval. Now which party was in charge of Congress starting January 2007? Oh yeah, it was the Democrats. And from the day they took charge of Congress, the public debt has increased from $4.9 trillion to $7.46 trillion. In less than 3 years the Democrat Congress has increased the public debt more than half as much as the previous 200 years combined.

[Joshua Holmes]

The Reagan/Kemp tax cuts did generate additional economic activity which led to higher tax receipts

As did Reagan's numerous tax raises. Remember that Reagan clawed back a full third of his income tax cuts a year after they passed, under the guise of "closing loopholes". Google "reagan tax raises" and learn something besides GOP talking points.

[Old Mexican]

Krugman: The turn to budget deficits was a direct result of the new, Irving-Kristol inspired political strategy of pushing tax cuts without worrying about the "accounting deficiencies of government."

I don't understand what's the problem - I thought Krugman loved deficit spendings. I guess he likes them as long as the "right people" are in power.

[mark]

Were it so, then by definition, there would have been four years when the national debt decreased.

Correct me if I'm wrong. When SS runs a surplus, the Treasury is forced to borrow that money. Thus, the nominal debt increases. Now, if they use that borrowed money to pay off debt held by other entities, rather than spending it and borrowing further to cover the rest of the budget, that could still be called a surplus, right? Nominal debt would stay the same in that case, because you'd be replacing T-Bonds owned by foreigners with T-Bonds owned by SSA.

[Laughter Is the Best Medicine]

I thought Krugman loved deficit spendings.

Deficit spendings = when you're overdrawn at the sperm bank!

[Michael Ejercito]

I don't understand what's the problem - I thought Krugman loved deficit spendings. I guess he likes them as long as the "right people" are in power.

When did he advocate deficits?

Bush destroyed any semblance the GOP might have had as a "fiscally responsible" party by leaving an annual baseline deficit of more than $1 trillion.

Bush owns $4 trillion of Obama's future first-term debt if nothing changes.

And Obama owns none of it?

[shrike]

Obama owns the deficit over the $1 trillion left to him.

Obama owns the UE rate over 8.5%.

Obama owns the Dow of Jan 20th - (about 7500?)

Are there overlapping statistical aberrations? Sure!

by any measure - check back on Jan 20th 2013 - Obama will trump Busholissimo in every marker.

[Michael Ejercito]

How much of that leftover deficit did he vote for while he was in the Senate?

[ryru]

Swillfredo, this method of reporting numbers is used as a comparison tool. It's not as effective to state "2.5 trillion" compared to "39 billion." 2500 billion compared to 40 billion draws a much easier comparison.

[Craig]

Shouldn't Krugman have to forfeit his Nobel Prize for ignoring something as basic as the fact that government revenues (unfortunately) continued to rise after the Reagan tax cuts?

[Libertymike]

johsua holmes-

Good point. John McCain has pointed this out on numerous occaisons.

[John C. Randolph]

As far as I'm concerned, a politician trying to blame problems on the previous office holder loses their credibility if they haven't reversed the policies that caused the problem. Obama's continuing and compounding every one of Bush's mistakes, from the wars in the middle east to the bailouts, to the expansion of government meddling in medicine.

-jcr

[Michael Ejercito]

This will go over the heads of the Obama apologists.

[shrike]

As far as I'm concerned, a politician trying to blame problems on the previous office holder loses their credibility if they haven't reversed the policies that caused the problem. Obama's continuing and compounding every one of Bush's mistakes, from the wars in the middle east to the bailouts, to the expansion of government meddling in medicine.

That is a very reasonable position.

I consider Obama too cautious on the Middle East. He should get us out.

And Medicare is the budget item out of control. His position is to curtail expenses in Medicare which has the old folk up in arms.

Ok - more reason.

Obama spent 1/3 of the stimulus on a tax cut - more reason.

Can't see the radical at work here....

[Old Mexican]

Re: Michael Ejercito,

When did he advocate deficits?

Are you kidding?

http://www.nytimes.com/2008/11/10/opinion/10krugman.html?_r=1&th&emc=th

Or here:

http://www.nytimes.com/2008/10/17/opinion/17krugman.html?_r=1&hp=&oref=slogin&pagewanted=print

If Barack Obama becomes president, he won't have the same knee-jerk opposition to spending. But he will face a chorus of inside-the-Beltway types telling him that he has to be responsible, that the big deficits the government will run next year if it does the right thing are unacceptable.

He should ignore that chorus. The responsible thing, right now, is to give the economy the help it needs. Now is not the time to worry about the deficit.

I mean, really Michael - HAVE you read ANYTHING from Krugman? Ever?

[Michael Ejercito]

I do not read much from him, because he is a fucking fool.

[Old Mexican]

Ha ha ha!

Michael, then you have not missed much - the guy is a dyed-to-the-wool Keynesian. Whatever he says, he always manages to get it wrong.

[J.]

Budget deficits and surpluses aren't really what's important other than as they relate to the national debt, which is the real problem. And of course, deficits grow the debt.

The Clinton era "surpluses" (FY1999 and FY2000) were literally rounding errors. Also, the debt still grew continually even during those years, and the interest paid on the national debt those two years far exceeded those budget surpluses. There were those two surpluses only because the government projected it would take in less in tax revenues than it actually ended up collecting. Capital gains and the dot-com bubble contributed to high tax revenues. I think if the government had made more accurate tax revenue projections, there would have been budget deficits instead.

With respect to Reagan, he was good in a lot of ways, bad in others. Budgetary matters fall mostly in the latter column. Of course, the spending was mostly for a massive military buildup, which led directly to the collapse of the Soviet Union by provoking a conventional arms race that the communist system could not sustain. Unfortunately, the Reagan administration set some horrible precedents, like raiding the Social Security trust fund to finance the build-up, and that process has never been reversed.

Some different Reagan administration officials stated their goal was to "starve the beast", meaning forcing government reduction through tax cuts concurrent with deficit spending. It's clear this hasn't worked too well so far. It does seem like it could in the future, though, as $12 trillion debt is a pretty damn hard sell...

[Libertymike]

J-

I see that you have bought the Reagan talking points that the massive military buildup brought down the Soviets.

[Some Guy]

Balanced. Budget. Amendment.

With teeth...

Let the government put an immediate non-financed price tag on every bridge and airport to nowhere, and I think we'll at least start heading in the right direction.

[Rich]

"Between 1980 and 2009, the federal government ran budget surpluses...four (4) times."

Not true.

Were it so, then by definition, there would have been four years when the national debt decreased.

Would someone *kindly* explain why people even entertain the notion of "surplus" in the face of such massive debt?

[Oh no not this again]

I could have read this "defense of a republican" on any "conservative" leaning website. Haven't the Reagan defenses, both zealous and halfhearted been done to death. It's like Reason has cooled down on talking about Health care reform, but only to replace them with Republican defense pieces.

[Schempf]

Shrike

I would assume Obama owns the over $2mm jobs lost in '09?

[J.]

Libertymike,

That's clever. Most politician's don't come up with talking points to explain things that occur after they've already left office! The fact is, there has never been any other satisfactory explanation. It was obviously an alignment of several separate conditions, but that is what most directly precipitated the Soviet collapse. Also, during the Reagan administration, the military's modernization and doctrinal changes made Western Europe actually defensible for the first time during the Cold War.

[hmm]

Kruggy is a special kind of tard.

[robc]

Rich,

Surplus is related to deficit, not debt. If you run a surplus one year, then the debt shrinks. Its not a surplus in the sense of "extra cash lying around".

As far as the other stuff, up thread, wrt SS and etc, the Treasury dept keeps track of two numbers, private debt and intergovernmental debt. The total debt, as reported by the Treasury is the sum of the two numbers. In the last Clinton years, the private debt went down, but the intergovernmental debt went up more.

Some people might consider one more accurate, some the other. The real accurate one would be the GAAP number and it would be too ugly to even think about.

Since we dont have a audited GAAP number to go by, I use what the Treasury reports, which is the total.

[Paul]

But Obama is nothing if not lucky - we will experience a robust rebound in 2011-12.

Not if Obama gets his agenda passed.

[Paul]

I'm not sure if its possible the government can run a surplus, because of the bogus bookkeeping the government does, but doesn't allow anyone else to do.

Unfunded future liabilities eclipse everything the government has in revenue.

[New York times reader]

Paul Krugman is so smart. You conservatives are just not smart enough to understand.

[Morris]

Nick Gillespie's economic knowledge doesn't equal a pimple on Paul Krugman's ass.

[Art-P.O.G.]

:::Shakes fist at Lefiti Morris.

[El Tejon]

$2,524??? That's all we got in '08?

Either Reason is edited by 8th graders or the feds are really down on their luck!

[Flyover Country]

"Nick Gillespie's economic knowledge doesn't equal a pimple on Paul Krugman's ass."

How ironic. It's that pimple on his ass that is doing all of Krugman's thinking.

[mark l.]

every single modern country dropped their marginal tax rates within 3 years of reagan taking it from 70% to 50%.

Clinton never brought the marginal rates above 40%, and even krugman would have a hard time arguing that we were cash strapped during his two terms.

If reagan was sooo wrong, why isn't there a country with draconian marginal rates, flourishing?

[mark l.]

paul's just mad that he won't live to see if he makes the greatest minds of the 21st century.

"Dr. Laffer has been widely acknowledged for his economic achievements. Recently he was noted in Time Magazine's March 29, 1999, cover story "The Century's Greatest Minds" for inventing the Laffer Curve, which it deemed one of "a few of the advances that powered this extraordinary century"."

http://www.cnbc.com/id/24732335/

[mark l.]

"I see that you have bought the Reagan talking points that the massive military buildup brought down the Soviets."

here's a graph of us military spending as a % of outlays:

http://en.wikipedia.org/wiki/F.....utlays.png

using the graph-reagan increased military spending as a % of outlays from 23% to 28%.

LOOK AT THE GRAPH....
from 1950 to 1974, the outlays as a % were far greater than the peak under reagan. If reagan was responsible for a military spending buildup that was irresponsible, what democratic outlay prior to 74 was reasonable?

we had econmic success in the fifties, as indicated by the surpluses, and yet military spending was over 50% of govt outlays for the entire decade.

[mark l.]

how does reagan get labeled with a "massive" military buildup, when federal spending increased only 14.5% in his first term, and 7.4% in his second term?

obama has increased spending by over 16% in his first budget...this is the same guy who said there would be a net spending cut in the third debate.

http://en.wikipedia.org/wiki/N.....tial_terms

obama will increase govt spending more in one year, than reagan did in his entire first term, and will also have eclipsed the ENTIRE spending increase under reagan by his second year's budget.

[mark l.]

one other point about reagan.

unemployment when he took office...
7.5%-11/80.

peaks at 10.8-12/82.

falls back to 7.2% in 06/84.

Reagan brought unemployment from 10.8% to 7.2% in 16 months?

Clearly supply side tax cuts 'exacerbate' employment. Every time you hear a democratic economic adviser suggest that employment will remain high for some time, they have to put on their party blinders to keep them from seeing the success of lower taxes under reagan.

greatest and fastest job creation in modern US history? ronald wilson reagan.

http://www.miseryindex.us/URbymonth.asp

[Leonard]

Since Reagan didn't take office until 1981, how does Krugman blame him for something that happened in 1980? Seems folk have very strange 200/20 hindsight when they try to write a political blog.

[Robert]

Very astute Leonard. If you watch Krugman he almost always defines the Reagan period as 1979-1990. His first inaugural was January 20th, 1981.

[TallDave]

Shut the fuck up, Krugman.

[Robert]

I always like to trot out this site in regards to the 90's surpluses.

http://www.craigsteiner.us/articles/16

[mark l.]

head to head comparison...

reagan v. obama-

there isn't a single postive statistic where obama will even come to reagan's accomplishments.

the number that will get hung onto obama? crime rate will explode under his tenure.

people with jobs don't have enough time to commit violent crimes. Double the unemployment rate of the 90's, and you will also double your crime rate of the same period.

if we accept high unemployment as our fate, then we should start building prisons, now.

the only way to create private sector jobs, 78% of the workforce, is to provide money to these businesses, in the form of tax cuts.

does krugman really believe that the private sector will grow faster, with less money?

fortunately for pk, there are enough idiots, so that he will always have a job telling them how good things will be.

[SukieTawdry]

Please stop with the surplus crap. There hasn't been an actual surplus in over 40 years (certainly not since LBJ's congress started mingling SS funds with the general fund). Clinton didn't have a surplus. Bush didn't inherit (and squander) a surplus.

Clinton's "surplus" resulted from intra-governmental over-borrowing. One day very, very soon, the governmental "trust funds" will need to start redeeming all those special issue treasury bonds and one day not too terribly long after that, there will be no more bonds to redeem. Then what?

[Pat]

Didn't Krugman receive $50,000.00 for "consulting work" for ENRON in 1999. Isn't it odd Krugman spent a couple of years blaming the Bush administration for its "role" protecting ENRON from Federal scrutiny.
I think people who were bilked by ENRON should pull Krugman into court to find his role in all of this.
Contact Chris Horner if you have any more info.

[Pat]

On point. If the $730 billion stimulus was used to eliminate federal income tax for ALL individuals regardless of amount of earnings, and end capital gains for companies that provide alternate energy, including nuclear would that have ended the recession by April, and we would be witnessing strong job creation by now?

I mention this in light Harding, Kennedy, Reagan, G.W Bush's general tax cuts, and even Clinton's (capital gains) cuts all impacted strongly on the economy within a couple of months of being effective.

For example two months after Bush's tax cuts impacted on the economy (May 28th 2003) America gained 250,000 new jobs per month immediately after. Only when Democrats were elected and assumed control of Congress and the Senate did US job creation, finance, and investment flow all turn negative.
Krugman economics at work, or should I say not at work for 557,000 last week....

[J.]

Regarding qualification of the Reagan defense buildup as "massive": Mark L., with the graph cited, you are comparing it to defense spending levels of the Korean War, the Vietnam War, and the period in the 1950s early in the Cold War. After World War II, the US essentially disbanded the entire military, and it needed to spend money to reconstitute it as the Cold War intensified.

But Reagan's military buildup was "massive", maybe not relative to those things or in number of divisions stood up, but in terms of technological and doctrinal progress and modernization, and in comparison to its evisceration under Carter in favor of funding social programs. When Reagan took office, there were about 400 defense programs at the end of their development, but languishing without funding for production. Reagan threw out Carter's last budget, capped the social programs, and doubled or tripled military expenditures on modernization and R&D as he (rightly) believed that defense was the first priority of the federal government.

That fully funded every defense program ready to go into production, like the Blackhawk, Patriot missile, M-1 Abrams tank, and the M-2 Bradley fighting vehicle, and he spent even more on the Navy and Air Force. He deployed the Pershing II tactical nuclear missiles to Europe (in response to the Soviet deployment of the SS-20) which could strike Moscow in ten minutes. Reagan deployed nuclear-armed ground- and air-launched cruise missiles to Europe and persuaded the European leaders to stand strong against all the rioting and protests against it. Reagan began development of the Strategic Defense Initiative ("Star Wars"), which also scared the shit out of the Soviets. All those things intimidated the Soviet Union into entering the SALT and CFE talks to limit nuclear weapons and conventional forces in Europe.

The Soviet Union was in the process of destroying their economy through unsustainable spending while their people were suffering under central planning. Reagan took a confrontational stance with the Soviet leadership, and his actions were the catalyst for the collapse of communism in Europe.

[J.]

Another thing to consider about that Wikipedia graph is that it measures US defense spending as a percentage of total government spending.

In that context, you consider that the high defense spending relative to other spending in the 1950s predated the interstate highway system (est. 1956), Medicare and many other "Great Society" programs (1960s), and the Carter-era social programs (1970s). By the same token, while Reagan reduced Carter's social programs to some degree, he did not completely cut most of them (although he did cap them).

It would be more informative to compare the defense budgets as a percentage of GDP, as done here.

[Roger Godby]

@Kevin,
I work with some who fellates Krugman intellectually, if that's not an exaggeration of the mental level.

[Rich]

robc|9.30.09 @ 9:54PM|#
Rich,

Surplus is related to deficit, not debt. If you run a surplus one year, then the debt shrinks. Its not a surplus in the sense of "extra cash lying around".

Thanks, robc.

I was hoping there might be more to it. ;-(

[Mark A. Sadowski]

During the entire post WW II period through 1980 total debt as a percent of GDP never exceeded 170%. In fact it had been fairly constant.

Then in 1980 something changed:
Between 1980 and 1988 household debt grew from $1396 billion to $3043.6 billion, business debt grew from $1478.1 billion to $3409.2 billion, financial sector debt grew from $771.5 billion to $2415.6 billion and government sector debt grew from $1079.4 billion to $2997.9 billion. Total debt grew from $4725 billion to $11,866.3 billion between 1980 to 1988. As a percent of GDP it grew from 169.5% to 232.7%. (Nominal GDP grew from $2788.1 billion to $5100.4 billion.) Total debt grew faster than nominal GDP at an average rate of 4.0% annually.

Prior to Reagan financial sector debt had never exceeded 30% of GDP and household debt had never exceeded 60% of GDP in the entire history of the republic. Both records were shattered during his presidency.

Between 1988 and 2000 total debt as a percent of GDP continued to grow albeit at a much slower pace. It rose to 272.7%, growing faster than nominal GDP at an average annual rate of 1.3%. However under Bush 43 total debt reached 363.8% of GDP by 2008, growing faster than nominal GDP at an average annual rate of 3.7%. As of 2008 household debt stood at $13,794.8 billion or 95.5% of GDP and financial sector debt stood at a staggering $18,947.9 billion or 131.2% of GDP.

Bush would have made Reagan proud, but even he failed to match him in terms of the rate at which total debt grew during his presidency.