In this post, we’re going to talk about the national debt as well as whether President Biden or former President Trump added more to the national debt. In addition, we’ll look at some numbers that highlight just how much worse the situation has become in the Unted States.
Now on the 6/25 debate between Trump and Biden there was a lot of fingers pointing between the two in terms of who added more to the debt. Biden claimed Trump added more, while Trump pointed the finger at Biden. Oddly, even though Biden was wrong, this was probably one off his better moments from that horrific debate.
CBO Estimates
To begin looking at the numbers I want to highlight the CBO estimates on the national debt the last few years. The CBO tends to be left leaning and has stated Trump has added more to the national debt than Biden.
Ironically though, the CBO s own estimates say otherwise. They provide proof that Biden has done more damage to our fiscal health. For example, when Trump left office, in 2021 the CBO projected that the national debt would be 35.3 trillion in 2021. Today the CBO is projecting the national debt in 2031 to be 42.5 trillion. That’s over 7 trillion higher than when Trump left office.
Still, while both have clearly added way too much to the debt the last 7-8 years, we will see that Biden is the clear loser in this argument. On the surface, it might appear that Trump added more, but we need to analyze what, when and how the debt was added in a bit more detail.
The National Debt
To sum, on the surface, the national debt increased by 7.7 trillion under Trump while he was president. This includes emergency COVID spending. Biden added 4.7 trillion his first three years. Another 1.5-2. trillion is projected to be added this year. That means he will have added about 6 trillion at least to the debt after his first term.
Now on the surface it appears that Biden has won the argument. However, this needs to be put in context and we need to examine other stats that tell the whole story.
For Trump, as many of you know, he was forced to spend tons in 2020 due to Covid. The country was in a state of emergency, so the spending was justified. The three years prior, Trump had only spent 2.5 trillion. So, if not for Covid there would be no argument at all, and he would clearly be the winner.
What About Treasury balances?
We also need to discuss what has happened with treasury balances.
Of that 7.7 trillion borrowed by Trump, 1 trillion of that money was never spent. It was kept in the Treasury, basically as savings, during the Pandemic in case something were to happen.
This means Trump borrowed the money but never spent it.
Interestingly, using Treasury balances the national debt rose 6.5 trillion under Trump and almost 8 trillion under Biden for just three years.
So, in summary, Trump saved about a Trillion dollars in the US Treasury, but Biden spent this money. The finance mainstream press is attributing this borrowing to Trump though, although Biden spent it.
In addition, it’s important to Look at How the Candidates Spent money
Much of Joe Biden’s increase in the debt is due to things that should have never existed. For example, increases in student loan forgiveness, an expansion of the Affordable Care Act that covers illegal immigrants, and bogus green energy tax credits that don’t boost economic activity.
Generally speaking, we have been spending way too much in what should be or what many mainstream financial news channels say is a normal or strong economy. Right now, our deficit to GDP ratio is around 7%: this is way too high.
On the other hand, Trump, much of his spending was because we were in the initial year of Covid. This was with emergency spending and needed to be done.
A Recent Article
Now a recent article came out from the Hill stating “Trump Added Twice as Much to the National Debt as Biden.” It is based on a report from the left leaning Committee for a Responsible Budget.
However, this article is completely misleading. For one it is based on projections and how the economy will react, not actually what has happened. In addition, it factors in the first year of COVID which more than doubled the amount Trump added to the national debt. This was an emergency situation in our country and isolated to one year.
We see that spending has gone up needlessly under Biden. He should have been able to significantly reduce deficits but instead has put us on a more frightening path. I believe we will see a debt death spiral, hyperinflation or another disastrous economic scenario. It’s clear the US dollar is losing much of its value. This is why I stack gold and silver to preserve my wealth.
How a Debt Death Spiral Could Happen
Reasons to Stack gold and silver
At some point the music is going to stop and it won’t be pretty.
