So now that the debt celing as been suspended, i decided to do some research. A lot of people support the current Admin's continuation to spend large amts. of money each year by saying Pres. Obama inherited the debt from Pres. Bush. First off, i do not intend to bash the Presidnt. I am not a republican or a democrat so i am not partial to either.
note: all percentages are in relation to GDP
Lets look at some historical facts. Federal gov't deficits were being run quite high under Reagan and H. W. Bush. If we compare Pres. Clinton's admin. with Pres. Obama's, we can see a sharp contrast in their spending habits. Clinton inherited a 4.7% deficit from H. W. Bush and Obama inherited a 3.2% deficit from G. W. Bush. However, in Clinton's first year, He managed to reduced the deficit by .8% to 3.9%. He continued this trend and in 6 years, the country saw a gov't surplus in 1998. Not only that, but by the time he left office, the government ran a surplus of 2.4%.
Obama inherited a 3.2% deficit from G. W. Bush and in his first year, managed to increased the deficit 6.9% all the way up to 10.1%. Throughout His admin, these figures have been declining but not very impressively. in 2012, the gov't ran 7% budget deficits.
Note: the lowest deficit under Obama is twice the amount of Bush's highest deficit (in 04') as compared to GDP.
In total, Pres. Clinton added about $450 billion to the national Debt in 8 years. Pres. Obama added about $4.5 trillion in 4 years (G. W. Bush added just shy of $2 trillion to the nat'l debt in 8 years). All these figures have been adjusted for inflation.
Pres. Clinton and Pres. Obama are both democrats and both inherited a large gov't deficit from their republican predecessors, with Clinton inheriting a larger figure than Obama. There can be no argument that the reason Obama spends so much has anything to do with Bush.
To all you keynesians out there who believe gov't spending is needed to grow the economy, please tell me, where is the 4 and 1/2 trillion dollars the government has spent these last four years? Do you think this money is creating jobs? Will you point me towards falling unemployment rates? Do you not know that the reason unemployment is declining is not because more ppl are employed but because ppl are pulling themselves from the labor force.
Unemployed are those who are willing and able to work looking for work. If those without a job decide they no longer wish to look for work, they are no longer a part of the "unemployed" and the figure goes down. Is that progress?
The government CAN create jobs by spending others people money, but jobs do not necessarily equal a growing economy. Valuable jobs must be created to create wealth. the government simply creating jobs that society has little to no need for and is not demanding does not add to the economy. There is a reason those jobs are not there. We don't need them anymore. It is a sign that resources need to be allocated elsewhere for a different purpose. If the government was able to produce wealth by creating jobs, let's outlaw all farming machinery and give the farmers spoons. That way, more ppl would be needed to harvest food because lots of ppl would be needed to dig. but does this help the economy? No, it does not.
my source for the facts and figures:
Whitehouse Office of Management and Budget (OMB)