The U.S. Debt Ceiling: A Historical Look

[Hot Mega]

The coming debt ceiling battle is the topic du jour in Washington. Republicans argue that simply raising the ceiling over and over again is an unsustainable policy, so they're demanding budget cuts. Many democrats agree that the U.S. has a deficit problem, but they stress the necessity of raising the ceiling promptly, to prevent default or problems funding other U.S. obligations. When assessing the need for fiscal reform, it helps to look back at the past.

The debt ceiling was first set in September 1917. At that time, Congress authorized the issuance of about $7.5 billion in U.S. bonds and another $4 billion in certificates of indebtedness, under the Second Liberty Bond Act. How much was $11.5 billion dollars back then if you account for inflation? In March 2011 dollars, it would be $193.2 billion. Currently, the debt limit is set at $14.3 trillion -- so inflation doesn't tell the whole story! To be sure, Washington's love affair with debt has grown.

So first, here's the debt limit throughout history, charted along with actual U.S. debt outstanding:

The chart shows that the debt ceiling (thick red line) didn't even hit $1 trillion until 1982 -- less than 30 years ago. Since then, it's increased exponentially. Of course actual debt outstanding (thin green line) moves pretty much in sync with the debt ceiling, as it generally only rises when the government decides to issue more debt.

You can see the ceiling is a sort of step function, as it increases based on Washington's whims, not a natural mechanism. This chart also shows that increases in the debt ceiling are quite common. Over the 94-year period, the debt ceiling has been revised 102 times.

Another good way to look at debt is by considering its ratio to the nation's GDP. This both provides an estimate for how much the U.S. is borrower compared to how much it's producing and allows inflation to drop out. Here's the chart (GDP data is only available from 1929):

Ceiling leak.....
http://www.theatlantic.com/business/archive/2011/04/the-us-debt-ceiling-a-historical-look/238061/

 

[titsrock]

So, on quick glance -- our debt began to skyrocket under Reagan, it "leveled off" somewhat under Clinton, skyrocketed orgystyle under Dubya and Obama has basically kept the status quo. Let's give a hand to the fiscal superiority of the Republican Party everyone!! :clap:

 

[feller469]

since 1981, Democrats have had control of the White House for 10 years

 

[Hot Mega]

So, on quick glance -- our debt began to skyrocket under Reagan, it "leveled off" somewhat under Clinton, skyrocketed orgystyle under Dubya and Obama has basically kept the status quo. Let's give a hand to the fiscal superiority of the Republican Party everyone!! :clap:

Keep in mind Obama is carrying over a policy in the middle east that will fairly cease by 2012 IMO. That will impact spending and debt greatly (to the positive).

since 1981, Democrats have had control of the White House for 10 years

What are you saying, we can't afford anything and they don't like spending unless it's on stuff they like??

They sound like a few wives I know.:o

 

[feller469]

Republicans claim to be fiscally responsible, yet they are equally responsible for the economic mess we are in . Because the average American relies on sound bytes and propaganda to make up his mind on a political issue, as a people, we get what we deserve from the elitist, bought-and-paid-for Senators

 

[Legzman]

I have a hard time contemplating millions as a figure for money. You really lose me in the billions and trillions...

 

[316sherm]

Republicans claim to be fiscally responsible, yet they are equally responsible for the economic mess we are in . Because the average American relies on sound bytes and propaganda to make up his mind on a political issue, as a people, we get what we deserve from the elitist, bought-and-paid-for Senators

Agreed!
:hammer:

 

[Hot Mega]

Republicans claim to be fiscally responsible, yet they are equally responsible for the economic mess we are in . Because the average American relies on sound bytes and propaganda to make up his mind on a political issue, as a people, we get what we deserve from the elitist, bought-and-paid-for Senators

What I have the hardest time with is GOPers who harp now on 'mortgaging our children's future', the evil of debt, etc., etc., etc. had absolutely NO PROBLEM (I mean zero problem) with borrowing billions of dollars for the express purpose of forging a democracy in another country (aka '(no) nation building').

I mean who can't see that these jokers are worse? Frankly if Demos screw up it's mostly because they don't know any better. But isn't the fucking up worse when you're experts at knowing how to convince people to let you do it?

 

[titsrock]

What I have the hardest time with is GOPers who harp now on 'mortgaging our children's future', the evil of debt, etc., etc., etc. had absolutely NO PROBLEM (I mean zero problem) with borrowing billions of dollars for the express purpose of forging a democracy in another country (aka '(no) nation building').

Because as the party of "Globalization" it's not enough for the GOP to wreck "our children's future" they are happy to seek out other countries and wreck their children too :facepalm

The Democrats have the reputation of being the spineless, coward party and sadly that's all we've seen from them since 2008 really.

But here's another chance for the Dems to beat on the Republicans -- the latest oil spill in Montana is the right kind of issue where they can guide the national discourse BACK TOWARD green tech/no more fossil fuels, and they can make sure we all see another oil company behave shady and dishonest during a time of failure and disaster....

I find the Republicans' silence with this spill to be really telling....:shocked:

 

[Juliuscaesar]

You forgot to mention that the Dems had the House throughout Reagan's and the latter part of Bush's administration.After all, the House does control the purse.:2 cents:

 

[Hot Mega]

You forgot to mention that the Dems had the House throughout Reagan's and the latter part of Bush's administration.After all, the House does control the purse.:2 cents:

Not single penny get's spent unless the president signs the bill...Unless you're now ceding the credit usually assigned to Reagan for the economy to the Dems who controlled congress.:o

(Point, you can't have your cake and eat it too.)

 

[Straight Shooter]

What I have the hardest time with is GOPers who harp now on 'mortgaging our children's future', the evil of debt, etc., etc., etc. had absolutely NO PROBLEM (I mean zero problem) with borrowing billions of dollars for the express purpose of forging a democracy in another country (aka '(no) nation building').

I mean who can't see that these jokers are worse? Frankly if Demos screw up it's mostly because they don't know any better. But isn't the fucking up worse when you're experts at knowing how to convince people to let you do it?

The simple is answer is because the GOP doesn't care. You know what their top priority is? It's not the economy that's for sure. I'll let Mitch McConnell tell you.

 

[316sherm]

http://news.yahoo.com/obama-press-statement-2200-gmt-220257502.html

It's not looking good!

 

[CH3NO2]

http://www.bloomberg.com/news/2011-...r-a-more-expensive-crisis-later-ron-paul.html

 

[StanScratch]

The tea baggers and Republicans are doing their very best to fuck the country over forever, simply so they can blame it on Obama.