I thought my regular blog readers would be interested in this old article I put together before the last presidential election. It’s interesting to see what my perceptions were at the time and gives a quick look back at what was in the news at that moment. The WSJ (Wall Street Journal) in particular offered this subject heavy coverage – no surprises there I guess! Read on to see how I personally covered those events.
The presidential elections are looming large and it is a dead heat between the two candidates Mitt Romney and President Obama. Obama may have let Romney back into the running after a well publicized poor showing in the first debate on October 3 in Denver. The national debt that stands at just over $16 trillion was a hot topic.
President Obama has made it clear in his campaign speeches and the debate that the national debt has skyrocketed in the last decade with the Bush tax cuts and the unnecessary war spending. This might be true but let’s look at some numbers here. George W. Bush presided over a period that saw the national debt go from $4.899 trillion to $10.626 trillion. In comparison, in only Obama’s first term the debt has hit a new high of a little over $16 trillion.
However, it must be taken into consideration that President Obama inherited much of this debt. The economy was in serious trouble when Obama took office and there was actually $8 trillion worth of debt for the next ten years.
In reality, the two presidents may not be so much to blame for the ballooning national debt.
Over the last century, there have been many government programs that have been introduced that have continued to add to the national debt. Social Security, Medicare and Medicaid are some of these costly but very beneficial programs that have offered a lot for the elderly and the poor. Baby Boomers were not planned for in these aid programs and so costs will continue to rise as they retire in record numbers.
President Reagan may not have realized what he had set into motion when he decided to increase the debt ceiling to over $1 trillion. This debt ceiling was recently raised and it has been a common occurrence since Reagan first did so.
Interestingly, the stimulus and the $832 billion TARP that Obama and Bush were responsible for were effective and a need of the time. They did add to the national debt, but it must be remembered that there weren’t any good alternative ideas offered. Economists agree about the stimulus and TARP being helpful for the U.S. economy. However, a lot of economists like Nobel laureate Paul Krugman have not been in favor of Republican proposals with the popular case of the budget proposal by policy wonk Paul Ryan being widely lampooned.
The Obama administration has tried hard to address the issue of debt with student loan reform being one of their ideas to curtail growing student debt. The government will incur extra costs with the introduction of this student loan reform. Nevertheless, it could grow the economy and increase productivity considerably with a better labor force. The upcoming presidential election is crucial, but it seems like both candidates will tackle this problem.Despite, the S&P downgrade of the U.S. credit rating to AA+, the U.S. is not going to be faced with a gargantuan task to reduce the debt. People will be pleased to note that modest growth rates of about 2.5 percent should do the trick – and this is backed up by commentary currently running in the Wall Street Journal Weekend edition and daily editions.