Responsibility

* The U.S. Constitution vests Congress with the powers to tax, spend, and pay the debts of the federal government. Legislation to carry out these functions must either be:

passed by majorities in both houses of Congress and approved by the President; or

passed by majorities in both houses of Congress, vetoed by the President, and then passed by two-thirds of both houses of Congress; or

passed by majorities in both houses of Congress and left unaddressed by the President for ten days.

* Other factors impacting the national debt include but are not limited to legislation passed by previous congresses and presidents, economic cycles, terrorist attacks, natural disasters, demographics, and the actions of U.S. citizens and foreign governments.

Current Policies

* In 2013, the Congressional Budget Office projected the publicly held debt that the U.S. government would accumulate under current federal policies and their economic effects. Combining these projections with historical data and actual outcomes since then yields the following results:

* Other than interest on the national debt, most of the long-term projected growth in federal spending is from Medicare, Medicaid, Social Security, the Children’s Health Insurance Program, and the Affordable Care Act (a.k.a. Obamacare).

* Per the Congressional Budget Office, postponing action to stabilize the debt will:

“substantially increase the size of the policy adjustments needed to put the budget on a sustainable course.”

punish younger generations of Americans, because most of the burden would fall on them.

reward older generations of Americans, because “they would partly or entirely avoid the policy changes needed to stabilize the debt.”

World War II Comparisons

* World War II began in 1939, the U.S. joined it in 1941, and it ended in 1945. It was the deadliest and most widespread conflict in world history, claiming 40–50 million lives. In 1946, the U.S. national debt reached 118.4% of the U.S. economy (GDP), the highest it had ever been in the history of the United States until this record was broken in May of 2020.

* The following Ph.D. economists and political scientists have claimed that high levels of national debt during World War II prove that the modern national debt is not a serious threat:

Paul Davidson, editor of the Journal of Post Keynesian Economics and author of The Keynes Solution: The Path to Global Economic Prosperity:

Rather than bankrupting the nation, this large growth in the national debt [during World War II] promoted a prosperous economy. By 1946, the average American household was living much better economically than in the prewar days. Moreover, the children of that Depression–World War II generation were not burdened by having to pay off what then was considered a huge national debt. Instead, for the next quarter century, the economy continued on a path of unprecedented economic growth and prosperity….

Douglas J. Amy, professor of politics at Mount Holyoke College:

Conservatives are also wrong when they argue that deficit spending and a large national debt will inevitably undermine economic growth. To see why, we need to simply look back at times when we have run up large deficits and increased the national debt. The best example is World War II when the national debt soared to 120% of GDP—nearly twice the size of today’s debt. This spending not only got us out of the Great Depression but set the stage for a prolonged period of sustained economic growth in the 50s and 60s.

Paul Krugman, Nobel Prize-winning economist and Princeton University professor:

Right now, federal [ publicly held ] debt is about 50% of GDP. So even if we do run these deficits, federal debt as a share of GDP will be substantially less than it was at the end of World War II.

Again, the debt outlook is bad. But we’re not looking at something inconceivable, impossible to deal with; we’re looking at debt levels that a number of advanced countries, the U.S. included, have had in the past, and dealt with.

* None of the publications above mentioned that in the 40 years that followed the end of World War II (1946–1985):

federal spending as a portion of GDP fell by 50% within two years and averaged 41% lower than the last year of the war during this period.

the national debt as a portion of GDP declined by 76 percentage points.

* In 2010, around the time when the scholars made the claims above, the Congressional Budget Office projected that under current policies and a sustained economic recovery over the next 40 years:

average federal spending as a portion of GDP will average 72% higher than in the four decades that followed World War II.

the publicly held national debt as a portion of GDP will rise by 277 percentage points and grow thereafter to about nine times the peak of World War II:

* By the end of June 2020, the total national debt had risen to 123% of GDP, or 4% above the peak of World War II.

Alternative Policies

* As alternatives to the current policy projections above, the Congressional Budget Office has also run projections for scenarios such as these:

1) Current law:

Due to bracket creep, federal revenues will incrementally increase from 18% of GDP in 2014 to 24% in 2084. At this point, federal revenues will be 35% higher than the average from 1974 to 2013.

Federal spending on all government functions will incrementally increase from 20% of GDP in 2014 to 26% in 2040. At this point, spending will be 27% higher than the average from 1974 to 2013.

Payments for Medicare services will undergo reductions that will likely cause “severe problems with beneficiary access to care.”

2) Republican Congressman Paul Ryan’s 2014 budget resolution, called the “The Path to Prosperity”:

Starting in 2024, Medicare beneficiaries will have a choice to enroll in private plans paid for by Medicare or remain in the traditional Medicare program. Also starting in 2024, the eligibility age for Medicare benefits will incrementally rise to correspond with Social Security’s retirement age. Compared to the projections under the current policy scenario, Medicare spending will be 0.5% lower in 2016, 2% lower in 2020, and 4% lower in 2024.

Federal Medicaid spending will be converted to an “allotment that each state could tailor to meet its needs, indexed for inflation and population growth.” The expansion of Medicaid mandated by the Affordable Care Act (a.k.a. Obamacare) will be repealed. Compared to the projections under the current policy scenario, Medicaid spending will be 9% lower in 2016, 19% lower in 2020, and 24% lower in 2024.

All federal spending related to Obamacare’s exchange subsidies will be repealed.

Spending on all government functions except for interest payments on the national debt will incrementally decline from 19% of GDP in 2015 to 16% in 2025. (The average from 1974 to 2013 is 18%).

Revenues will increase from 18% of GDP in 2015 to 19% in 2032 and stay constant thereafter. (The average from 1974 to 2013 is 17%. )

* Combining historical data on the national debt with the Congressional Budget Office’s 2014 projections for current policy, current law, and the Ryan plan yields the following results:

Public Opinion

* Other than interest on the national debt, most of the long-term growth in federal spending under the Congressional Budget Office’s current policy and current law scenarios stems from Social Security, Medicare, Medicaid, the Children’s Health Insurance Program, and Affordable Care Act (a.k.a. Obamacare) subsidies.

* A poll conducted by Pew Research Center and USA Today in February 2013 found that:

70% of Americans say it is “essential for the president and Congress to pass major legislation to reduce the federal budget deficit.”

73% of Americans say that to reduce the budget deficit, the president and Congress should focus only or mostly on spending cuts.

41% think the government should increase spending in Social Security, 46% think the government should continue the same spending, and 10% believe the government should reduce spending in Social Security.

36% think the government should increase spending in Medicare, 46% think the government should continue the same spending, and 15% think the government should reduce spending in Medicare.

* A poll conducted by NBC News and the Wall Street Journal in February 2011 found that:

80% of Americans are concerned “a great deal” or “quite a bit” about federal budget deficits and the national debt.

if the deficit cannot be eliminated by cutting wasteful spending, 35% of Americans prefer to cut important programs while 33% prefer to raise taxes.

22% think cuts in Social Security spending will be needed to “significantly reduce the federal budget deficit,” 49% do not, and 29% have no opinion or are not sure.

18% think cuts in Medicare spending will be needed to “significantly reduce the federal budget deficit,” 54% do not, and 28% have no opinion or are not sure.

* A poll conducted in November 2010 by the Associated Press and CNBC found that:

85% of Americans are worried that the national debt “will harm future generations.”

56% think “the shortfalls will spark a major economic crisis in the coming decade.”

when asked to choose between two options to balance the budget, 59% prefer to cut unspecified government services, while 30% prefer to raise unspecified taxes.

* A poll conducted in July 2005 by the Associated Press and Ipsos found that:

70% of Americans were worried about the size of the federal deficit.

35% were willing to cut government spending.

18% were willing to raise taxes.

1% were willing to cut government spending and raise taxes.

Congresses

* During the first session of the 113th Congress (January–December 2013), U.S. Representatives and Senators introduced 168 bills that would have reduced spending and 828 bills that would have raised spending.

* The table below quantifies the costs and savings of these bills by political party. This data is provided by the National Taxpayers Union Foundation:

Costs/Savings of Bills Sponsored or Cosponsored in 2013 by Typical Congressman (in Billions) Increases Decreases Net Agenda House Democrats $407 $10 $397 Senate Democrats $22 $3 $18 House Republicans $9 $91 –$83 Senate Republicans $6 $165 –$159

* The table below quantifies the net agendas of the political parties in previous Congresses:

Costs/Savings of Bills Sponsored or Cosponsored in the First Sessions of Congress by Typical Congressman (in Billions) 2011 2009 2007 2005 2003 2001 1999 House Democrats $497 $500 $547 $547 $402 $262 $34 Senate Democrats $24 $134 $59 $52 $174 $88 $15 House Republicans –$130 –$45 $7 $12 $31 $20 –$5 Senate Republicans –$239 $51 $7 $11 $26 $19 –$324 NOTE: Data not adjusted for inflation.

Presidents

* In February 2001, Republican President George W. Bush stated:

Many of you have talked about the need to pay down our national debt. I listened, and I agree. We owe it to our children and grandchildren to act now, and I hope you will join me to pay down $2 trillion in debt during the next 10 years. At the end of those 10 years, we will have paid down all the debt that is available to retire. That is more debt, repaid more quickly than has ever been repaid by any nation at any time in history.

* From the time that Congress enacted Bush’s first major economic proposal (June 7, 2001) until the time that he left office (January 20, 2009), the national debt rose from 54% of GDP to 74%, or an average of 2.7 percentage points per year.

* During eight years in office, President Bush vetoed 12 bills, four of which were overridden by Congress and thus enacted without his approval. The Congressional Budget Office projected that these bills would increase the deficit by $26 billion during 2008–2022.

* In February 2009, Democratic President Barack Obama stated:

I refuse to leave our children with a debt that they cannot repay—and that means taking responsibility right now, in this administration, for getting our spending under control.

* From the time that Congress enacted Obama’s first major economic proposal (February 17, 2009) until the time he left office (January 20, 2017), the national debt rose from 75% of GDP to 104%, or an average of 3.6 percentage points per year.

* During eight years in office, President Obama vetoed 12 bills, one of which was overridden by Congress and thus enacted without his approval. The Congressional Budget Office projected that this bill would “have no significant effect on the federal budget.”

* In March 2016, Republican presidential candidate Donald Trump had the following exchange in an interview with Bob Woodward of the Washington Post::

Trump: “We’ve got to get rid of the $19 trillion in debt.”

Woodward: “How long would that take?”

Trump: “I think I could do it fairly quickly, because of the fact the numbers…”

Woodward: “What’s fairly quickly?”

Trump: “Well, I would say over a period of eight years.”

* From the time that Congress enacted Trump’s first major economic proposal (December 20, 2017) until December 31, 2019, the national debt rose from 102.9% of GDP to 106.8%, or an average of 1.9 percentage points per year.

* As of March 31, 2020, President Trump has vetoed six bills, none of which were overridden by Congress.