US National Debt Exceeds $ 22 Trillion: How Trump Is Different From Obama
WASHINGTON, DC – February 13, 2019
The US national debt has exceeded $22 trillion for the first time, just 11 months after it hit $21 trillion.
Thus, since Donald Trump assumed the presidency, the national debt has grown by $2 trillion. The acceleration was particularly noticeable last year, when Trump cut taxes by $1.5 trillion, and Congress took measures to increase spending on domestic and military programs.
The Congressional Budget Office predicts a deficit of $897 billion this year, which is 15% more than last year. And from 2022, the figure will exceed $1 trillion and will not fall below this level, as baby boomers will continue to retire.
The Trump administration, however, is confident that tax reform will accelerate economic growth and the initial overhead will pay off, and the budget deficit will stabilize. But many economists disagree with this.
It is worth noting another point: Last year, within a context of growth in treasures yields to multi-year highs, the burden on the budget increased significantly as loans became more expensive. But now, through various manipulations of the Fed and other factors the rates of return have fallen to an acceptable level, and the problem has faded into the background.
According to Margaret Kerins, chief strategist for bonds in BMO Capital Markets Corp, given the slowdown in the global economy, Brexit, and the problems of China, there is a demand for risk-free assets, liquidity and quality, which means the demand for Treasury bonds – and this, to some extent, controls the yield rates.
Experts like to compare the dynamics of debt burden under Obama and Trump. Over the 8 years of Obama’s presidency, America’s national debt increased by $9.3 trillion, that is, it almost doubled.
Experts draw attention to one significant difference. During the Obama administration, the Fed bought enormous amounts of US debt securities under the QE program, and now quantitative easing has ended.
As you know, the Fed recently changed its rhetoric and does not even rule out an increase in the balance sheet. The regulator may resort to additional measures, perhaps, just to keep the yield rates of treasuries at an acceptable level. Otherwise, the debt load may be unstable.
Do not forget, President Trump has extremely ambitious plans that require more and more borrowing, so the US national debt will continue to grow.