The Congressional Budget Office (CBO) reported that the federal budget deficit for fiscal year 2016 was a whopping $588 billion, up from $439 billion in FY2015. The CBO projects the deficit to rise to almost $600 billion in FY2017. That is bad enough.
Yet the Treasury Department quietly reported that the national debt exploded by $1.42 trillion in FY2016, which ended on September 30th. This was the third largest annual increase in the national debt in history. To learn of this development, one had to go to the TreasuryDirect website and plug in the dates (September 30, 2015 to September 30, 2016) to get to the $1.42 trillion number.
The difference between the CBO’s $588 billion deficit and the $1.42 trillion increase in the national debt is $834 billion. The difference is that the Treasury Department measures ALL federal spending, including “on-budget” and “off-budget” expenditures. Off-budget expenditures include Social Security, the Postal Service, Fannie Mae, Freddie Mac and some smaller items that are not included in the so-called “unified budget.”
Here are the numbers. As of September 30, 2015 the national debt stood at $18.15 trillion. On September 30, 2016 the national debt had risen to $19.57 trillion. That’s an increase of $1.42 trillion for FY2016 – again, the third largest annual increase in U.S. history.
To put that debt increase into perspective, there are just over 118 million households in the U.S. according to the Census Bureau. The $1.42 trillion increase last year alone equaled just over $12,000 of debt per household. The total federal debt of $19.57 trillion now equals almost $166,000 of debt per household. Let that sink in.
The question is, why does the government only report publicly the on-budget increase in the debt, in this case $588 billion as reported last week, and not the total debt increase of $1.42 trillion? Basically, they know that not many of us track the total debt as reported by the Treasury Department. In truth, most Americans don’t keep track of either number.
One final thing: Keep in mind that there is no “debt limit” in place at the moment. In October of last year, President Obama and congressional leaders suspended the debt limit until March 15, 2017. Here’s what I wrote about it back then: “The debt ceiling suspension is until March 15, 2017. In the meantime, the government can spend as much as it wants – no limits. Get ready for a national debt of more than $20 trillion by that time.”
The national debt is on-track to top $20 trillion around the middle of next year. That’s scary!
President Obama’s Weak Legacy Illustrated in One Graphic
I remarked a short while ago in these pages that I believe President Obama will go down as one of the worst presidents in U.S. history. I want to revise those remarks today. Because most historians are liberals, I do not believe they will relegate the first black president to the ranks of some of the worst presidents in our history. He will probably be praised in that regard.
Yet as far as economic performance goes, he will indeed rank among some of the worst presidents ever. As I wrote just recently, he is the first president not to see a single year of 3% growth in GDP. I ran across the graphic below last week, and it speaks for itself.
All of the charts above are from the Federal Reserve Bank of St. Louis, which labels its charts with the acronym “FRED.” Someone in the private sector went to the St. Louis Fed’s website, pulled all of the above charts separately, grouped them altogether in one file and labeled them in red so as to be able to read what each chart shows.
I’ll leave it to you to draw your own conclusions about President Obama’s legacy in light of these charts. Everyone I’ve shown this graphic to was stunned.
Gary D. Halbert is the president and chairman of Halbert Wealth Management, Inc. His Forecasts & Trends Weekly E-Letter may be obtained free of charge by subscribing at www.halbertwealth.com.