You can't fairly characterize doing what they always intended to do, and everyone who knew anything about the situation other than slogans knew they were going to do in the first place, "caving".
This whole "shutdown" exercise was nothing more than a PR and fundraising exercise for the 70% or so of each party who have completely safe seats; and an attempt to "challenge from the right", the 15% or so Republican seats that are completely safe for the party, but for whom the voters may be persuaded to choose a different Republican.
This is not to say that U.S. federal debt isn't a serious problem, of COURSE it is... just that no-one in Washington was ever going to try to actually do anything about it.
To do so would require cutting spending; and regardless of what voters claim to be for, very few of them would stomach actual cuts to actual programs they like or approve of "only those unnecessary things the other guy likes".
Congress is not there to govern, they are there to acquire and spend money, in order to get votes. If you don't understand this by now... you probably shouldn't bother reading the rest of this.
They are SUPPOSED to be there to govern yes, but they pretty much gave up on that, some time between February 3rd, and May 31st, 1913 (look it up).
So, to be clear, the alternatives here were not "raising the debt ceiling" or "cutting spending"... because no-one was ever even approaching the idea of making meaningful cuts in spending.
The alternatives were "raising the debt ceiling", and "continuing to manipulate the currency and using accounting tricks to pretend that we aren't raising the debt ceiling".
Oh yeah... the fourth option there, "government default" wasn't ever going to happen either. The likely consequence of the federal government defaulting on debt right now, would be a global financial panic followed by a global depression.
Ok... so, given that what's the basic situation right now?
As of today, the U.S. federal debt stands at $16.75 trillion USD, and increasing about 2.7 billion every day. We've actually technically been over the debt ceiling of $16.7 trillion for about 4 months, but we've been using accounting tricks to avoid "officially" breaking it.
Right now, we're taking in about $14 billion per day, and spending about $17 billion per day.
That's in direct spending of course, and doesn't cover unfunded liabilities (those are MUCH larger).
Given today's "budget" (we haven't had an actual budget in 4 years, just long series of continuing resolutions and special appropriations... but that's another post) they're going to have to increase the debt ceiling 1.6 trillion to get us through another year.
So, this time next year expect the debt to be $18.3 trillion.
How exactly did we get here?
The short version?
Spending more than we took in... in some years only a little more, in a couple years slightly less, but in many years FAR more than we took in.
The long version is very long... but I think very illustrative and useful to know.
The LOOONG version
Ok guys this is a really long post full of mostly numbers. If you want the upshot, it's at the end. But if you would like to know just how much we've been screwed, and just exactly who did the screwing... Well, the devil is in the details.
First, the earth cooled, then Woodrow Wilson came
The U.S. Federal Debt ceiling was originally established in 1917 as a check against war spending for WW1.
WW1 was a war most of us didn't want to be in in the first place. Woodrow Wilson basically defrauded the country to force us into it, because he wanted to have the whip hand in post war negotiations to fulfill his grand design of a "league of nations".
With the debt ceiling legislation, congress were in theory, trying to keep the war spending under control, and to keep it from becoming a much larger war (and specifically to keep us from bailing out the British, French, and Belgians financially, or taking on the majority of the warfighting and war materials procurement).
In practice, they didn't actually do much to control the costs (though we did stay the "minority partner" in the war, as the U.S. electorate, and congress, intended; much to Wilsons disappointment).
In 1917, the debt ceiling was set at $13.5 billion dollars ($247 billion in 2013 dollars). It was quickly raised through the course of the war to $43.5 billion in 1919 ($590 billion).
That's more than doubling the debt in 2 years.
From 1919 through 1941, it grew to 50 billion ($800 billion). That even including the government spending of the "New Deal" years, which far exceeded our depression diminished revenues every year.
Between the wars debt grew considerably, but not at a ridiculous rate... about 30% in real terms, in 22 years. That's not all that bad considering the government growth after the 16th and 17th amendments, and particularly the post WW1 expansion of the executive branch (thanks again Wilson), and then the mother of all government wealth transfer programs, "the new deal".
Then World War II happened
From 1941 to 1945, US federal debt rapidly increased, from $50 billion ($800 billion), to $300 billion (4 trillion).
So, in 28 years, and two world wars, U.S. federal debt multiplied by a factor of 16; and in 4 of those years, it multiplied by a factor of 5.
That's a lot of debt... but hey, wars are expensive right?
The 50's...
Well, for the next 18 years, the debt stayed almost completely flat... actually it was reduced several times. It stayed around the 300 billion mark from 1945 all the way to 1963.
1963 was both the last time it was reduced, and the last time it was at 300 billion. However, because of inflation, that wasn't actually flat debt; it was in fact a significant reduction from 1945s $4 trillion 2013 dollars, down over 40% to $2.3 trillion 2013 dollars.
That's still 4 times the debt at the end of World War 1 of course.
Oh and by the by... throughout this explanation I'm going to use the debt limit, and the actual federal debt, as if they were the same thing... because for all but 8 years during this time period, they WERE the same thing. We have generally run either just under, or actually in most years jsut OVER the debt limit, but used accounting tricks to seem like we were under it.
Anyway...The '60s
Wars are expensive yes, but through the Viet Nam years, federal debt grew far slower as a percentage than it had during WW1 or WW2.
It took 'til 1967 to get to $350bb ($2.45tt), and 1970 to get to 400bb (2.41tt); really a very small increase from 1963... and again, still a significant reduction from the end of WW2.
Overall, there was a less than 5% constant dollar growth in the debt through the entire 1960s; and that is coming off of a large drop in the debt from the end of WW2.
The '70s
Now, inflation started rising rapidly from 1968, particularly from 1970-1984, so you can't really compare the raw year to year numbers from here. You need to compare the inflation adjusted numbers from here on out.
We hit $450bb in '72 ($2.51tt), $500bb in '74 ($2.371tt), $600bb in '75 ($2.608tt)... You can see again, slow growth or even shrinkage in constant dollar terms.
We hit $700bb in '76 ($2.9tt), $800bb in '78($2.9tt), 900bb in '79 ($2.9tt), and 935bb in '80 ($2.7tt), a big jump from '75 to '76, but then flat to a even a small reduction for 2 years.
Note, that was during the Carter administration, with a Dem controlled house and senate.
During the entire 1970s, we increased the debt by about 25% in constant dollar terms.
Then we hit
...the Reagan years...
Except the Reagan years really weren't the Reagan years; they were really the Tip O'neil years (speaker of the house from 1977 to 1987).
Everyone remembers Reagan as a big spender on the military... because he was, but also because that was the media portrayal of him, but they forget that for every dollar Reagan got added to the military, O'neill and the democrats got $2-3 added to other government spending; and Howard Baker and Bob Dole (the Republican Senate majority leaders from 1981 through 1986) were happy to go along with it.
In 1981, the U.S. federal debt hit $1 trillion for the first time, ending the year at $1.1 trillion ($2.83 trillion)... but in constant dollar terms, that was actually less than 1979, and only slightly more than 1980.
Really it's not all that much more than 1963... only about 22%, in a period where population had doubled, military spending had quintupled, social security had jumped from insignificant to 15% of the budget.
It took 'til 1983 to get to $1.5tt ($3.5tt), and then to '85 for $2tt ($4.35tt), just two years to double the debt in absolute terms. Though that was "only a 22%" increase in constant dollars; that's almost exactly the same amount the debt increased from 1963 to 1983 in constant dollars.
20 years debt in 2 years. Way to go guys.
Post 1984 inflation slowed dramatically, so the constant dollar differentials year to year are considerably less.
Oh and for you history buffs, 1985 was the year we equalled, then exceeded, our national debt levels at the end of World War 2 (in constant dollars).
So... we come to 1986 and at $2.3tt, we manage to double the 1966 debt, at $4.9 trillion in 2013 dollars (though only a 12% year over year increase from '85).
In '87 we went to 2.8tt (5.8tt) a 20% increase from '86, but managed to not increase the debt ceiling in '88... Unfortunately we made up for it in '89 moving up to $3.1tt ($6tt).
So, across the Reagan years, we went from $1 trillion ($2.83tt) to $3.2 trillion ($6.1tt)... More than tripling the debt in absolute dollars, and more than doubling it in constant dollars (117% to be exact)
Hmm... 40% debt shrinkage in the '50s, 5% debt growth in the 60s, 25% in the '70s... 120% in the '80s.
.. well, at least we slowed inflation down...
The '90s
And hey, we're getting into the '90s right? I mean yeah there was the '89 to '91 recession... and the first gulf war... but then there was the peace dividend and the .dot com boom, and the "surplus"... the '90s were prosperous years... we had surpluses... we shouldn't have increased the debt too much in the '0s right?
Sadly, wrong.
In 1990 alone, we increased our federal debt from $3.1tt ($6tt) to $4.2tt ($7.5tt) a 30% absolute increase, and a 25% constant dollar increase.
In constant dollars, that's also more than triple the 1960 debt
...and more than triple the 1970 debt...
...and more than triple the 1980 debt...
Once again... way to go guys...
But, by some miracle, during an incredibly expensive but incredibly short war, we managed not to increase our debt for 3 years... The entire rest of the first Bush presidency in fact.
On that one, seriously, way to go GHW Bush.
Clinton
But we started spending again the second Clinton was elected, and by the end of 1993 had increased the debt to $4.9 trillion dollars ($7.9 trillion in 2013 dollars).
Then we had our "surplus years"... all two of them (actually we never really had a surplus, but they made it look like we did by ignoring a bunch of stuff and some accounting tricks... it WAS however the closest we had actually come to a balanced budget since 1958, when we started using the social security taxes as part of the general revenues). We didn't increase the debt ceiling during 1994 and '95..
... but again we made up for it in 1996 by increasing it to $5.5tt ($8.2tt) and '97 to $6tt ($8.8tt).
Then the Republicans got serious... for a second... and we managed not to raise the debt ceiling again until 2002.. when the NEXT war started.
So, we went from a 120% debt increase in the '80s, down to a... 50% increase in the 1990s...
Those were the "surplus" years? The "peace dividend"? Really?
Yeah... not so good...
Bush the younger
Now, all you Bush haters... all you folks claiming Bushes spending is what ruined us etc... etc...
In the first 18 months of George W. Bush's presidency we increased the U.S. federal debt exactly...
ZERO
Yup, nada.
We didn't increase the debt ceiling at all from '97 'til late 2002
Then, as I said, the NEXT middle eastern war happened. And, as we know from earlier, wars are expensive.
Now, if you like, you can blame Bush for the wars... Though really, no matter who was president, we were probably going to have a war in Afghanistan, and a war in Iraq during the 2000s was a near inevitability as well. They certainly could have been run better and been over quicker however.In 2002 we increased the debt to $6.7tt ($8.71tt), a $700 billion, or 12% absolute increase from 1997...
Only in constant dollar terms, guess what...
It was actually a $100 billion dollar decrease.
In 2003 we went up to $7.4 trillion (9.4tt), another $700 billion increase... both in absolute and constant dollars since inflation was pretty much flat.
In 2004 it was an $800 billion increase to $8.2tt ($10.1tt) and again inflation was pretty flat.
These numbers by the way, are also the approximate annual costs of the war.
We didn't increase the debt during 2005... which was actually our highest spend year of the war in absolute dollars by the way; and in 2006 increase it another $800 billion to $9 trillion ($10.4tt), but inflation had increased so it was only a $300 billion constant dollar increase.
... though I should point out, the INCREASE in debt from 2004 to 2006, was 20% more than the ENTIRE debt in 1917 (in constant dollars)
... and the increase in previous years was more than the entire debt in 1941, at the outbreak of World War 2.
In 2007 we went up another... hey it's our friend $800 billion ($900bb) again... to $9.8 trillion ($11.1tt), another $700bb in constant dollars.
And in 2008... yup, another $800 billion to $10.6 trillion ($11.9tt), which was also an $800bb constant dollar increase.
Again, these numbers correspond roughly to the annual cost of the wars in Afghanistan and Iraq.
So for Bush BEFORE the 2008 financial crash we went from $8.8 trillion to $11.9 trillion increase, while fighting two wars, about 35%.
Not spectacular... but a hell of a lot better than it could have been
Except that in the last few months of the Bush presidency, we increased the debt another $700 billion, for the "bailout", bringing us to $11.3 trillion or $12.3trillion in constant dollars.
$8.8 trillion to $12.3 trillion... about 40%.
And finally we reach...
Barack Obama
Yaknow... I'm not even going to bother going year by year for this guy.
Barack Obama was sworn into office on January 20th 2009.
It's October 18th 2013.
That's 4 years, and 10 months. Let's round up to be generous call it 5 years.
In less than 5 years, under this president and this congress, we have increased our debt from $11.9 trillion to $16.8 trillion. Actually a bit more without the accounting tricks.
So... 5 trillion more or less.
Bush pushed the debt up 3.9 trillion in 8 years, or just about $500 billion a year.
Obama pushed the debt up 5 trillion in 5 years... about $1 TRILLION a year.
In constant dollar terms, that's more debt INCREASE every year than we had TOTAL before December 7th 1941.
In constant dollars it's 60% MORE THAN THE ENTIRETY OF WORLD WAR 2
Minute by minute...
As I am writing this, Obama has been president for 4 years, 271 days, 17 hours, 48 minutes, and 10 seconds.
That's 1733 days, 17 hours, 48 minutes, and 10 seconds.
That's 41,609 hours, 48 minutes, and 10 seconds.
That's 2,496,588 minutes, and 10 seconds.
That's 149,795,290 seconds.
That's a $33,378.89 increase in the U.S. federal debt EVERY SINGLE SECOND HE HAS BEEN PRESIDENT.
That's $2,002,733.40 every minute.
That's $120,164,004.00 every hour.
This guy has 3 years, 93 days, 7 hours, 11 minutes, and 50 seconds left to be president.
At this rate, that's another $3.5 trillion dollars.
Oh and in the decade of the 2000s, we went from $8.8 trillion to $13.5 trillion constant dollars; about 55% growth.
From 2010 to today, 3.8 years, we've increased the debt from from $13.5 trillion to 16.8 trillion or $3.3 trillion. Basically $900 billion a year more or less. So, we're on track to finish the 2010s at $22.2 trillion in constant dollars.
... To put it another way, in 2017, 100 years after the debt ceiling was first written into law; we will have increased our debt to approximately 100 times what it was in 1917.
The 2010a are on track to go from $13.5 trillion to $22.2 trillion is an $8.7 trillion increase, or about 65%
The final breakdown, decade by decade
40% debt shrinkage in the '50s
5% debt growth in the 60s
25% debt growth in the '70s
120% debt growth in the '80s
50% debt growth in the 90s
55% debt growth in the 2000s
65% debt growth in the 2010s (projected)
Well... to simplify, and to keep things more comparable, let's keep it post WW2. As it happens, debt stayed relatively constant in absolute dollars from 1945 to 1963 (though dropped in constant dollars), and 1963 was the last time the debt ceiling actually decreased... plus it's 50 years, a good round number... Let's take it from 1963.
Total debt growth in the last 50 years, in constant dollar terms?
Debt went from $2.3 trillion, to 16.8 trillion, a multiple of 7.3.
In 1963, the debt to GDP ratio was about 40%.
In 2013, the debt to GDP ratio is 101%
In 1963 the U.S. population estimate was 189,241,798
In 1963 the per capita U.S. federal debt was $12,153.76
In 1963, the mean salary for a full time worker was appx. $44,000
In 1963 the federal debt to personal income ratio about 28%
--all constant dollars. Note these are means not medians.
In 2013 the U.S. population estimate is 316,882,000
In 2013 the per capita U.S. Federal debt is $53,016.58
In 2013 the mean salary for a full time worker is appx. $47,000
In 2013 the federal debt to personal income ratio is about 115%
Note: If you take it by median individual income it's about twice as bad (the mean full time is only full time workers between 18 and 65. The median individual income includes the unemployed, retired, part time workers, under 18 and over 65 etc...).
So, our debt has increased by a factor of more than seven; and our per capita debt has more than quadrupled, as has our debt to income ratio.
... and yet... some people say "we aren't doing enough, spending enough..."
