In a world where headlines are crafted to captivate and numbers are thrown around like confetti, recent articles have sparked a heated debate over the national debt. One such headline boldly declared that “Trump Added Twice as Much to the National Debt as Biden.” With great fanfare but lacking in nuance, The Hill’s article has ignited a firestorm of discussions, leading many to question the context and accuracy of such claims.
The Congressional Budget Office’s (CBO) estimates often fail to capture the dynamic nature of fiscal policies and their subsequent impact on the economy. These estimates tend to conflate the act of allowing Americans to retain more of their earnings with government-driven spending aimed at achieving policy goals. The latter is often the product of decisions made by politicians and unelected bureaucrats, sometimes in stark contrast to the desires of the American public.
In examining the observable data, the difference in impact on the national debt between the two administrations is less stark than some might assume. Under President Trump’s administration, the national debt increased by $2.5 trillion over the first three years—an eye-popping figure, no doubt. However, under President Biden, the debt has surged by $4.7 trillion in the same timeframe. Even if one were to project figures for Biden’s incomplete term, the total debt increase under Trump stands at $6.7 trillion compared to $6.3 trillion under Biden. This highlights a rather inconvenient truth: both administrations have seen significant debt increases, albeit driven by different factors.
The surge in spending under the Biden administration can be attributed to several key policies. Unlike Trump’s emergency COVID-related spending, Biden’s administration has funneled resources into massive student loan forgiveness, expanded the Affordable Care Act to cover illegal immigrants, failed to cull bloated Medicare rolls post-pandemic, and grappled with soaring interest expenses. These initiatives, while noble in intent for some, have come at a significant financial cost.
Economist Peter Morici breaks down the complexities of the national debt, explaining why it has ballooned to more than $34 trillion and what this means for the average American. One of the most alarming consequences is its impact on mortgage rates, which remain elevated. This is a perilous situation because deficits are likely to balloon further when the economy inevitably slows down. Adding fuel to the fire, Treasury Secretary Janet Yellen’s decision to fund America’s long-term liabilities with increasing amounts of short-term debt has only exacerbated the issue. The weighted average cost of America’s outstanding debt is pegged at 3.2%, significantly lower than current interest rates, creating a ticking time bomb.
Ultimately, the solution lies in a robust commitment to growth driven by the private sector. Only by fostering an environment where private enterprise can thrive will America be able to navigate its way out of this debt quagmire. While policy debates and partisan bickering will undoubtedly continue, it’s crucial to remember that the road to financial stability is paved with informed decisions, economic growth, and a keen eye on the long-term horizon.