That national debt number of $ 22 trillion is huge, but this is what it really means

However, there are still two relevant statistics when considering national debts.

One is the percentage of the debt in comparison with the gross domestic product. This is an important measure because it measures both the ability of the government to pay its tab through growth, and because it helps to fear the dollar being measured in terms of how much growth the debt has helped generate.

Total indebtedness to the economy remained fairly low for decades until it began to rise in the early eighties while President Ronald Reagan fought the Cold War against the former Soviet Union.

The debt to GDP was about 30.6 percent when Reagan came in 1981 and then steadily climbed up to a peak of 65.3 percent in mid-1995, according to data from the Federal Reserve of St. Louis. The then President Bill Clinton and the Congress controlled by the Republican eventually built up a short-term government surplus, which meant that it was less necessary to borrow and the level fell to 30.9 percent in the second quarter of 2001.

From there, borrowing to finance two wars along with two recessions of guilt against GDP has been sent to 77.3 percent by the time Obama took office. When Obama left, the level had risen to 103.6 percent.

Under Trump there was only a small rebound in that respect, with a level now standing at 104.1 percent.

The other relevant value is the debt held by the public, which & # 39; intragovernmental holdings & # 39; research, or money that the government lends to operate from various trust funds such as social security and Medicare.

That figure also began to rise in the early 1980s, from less than $ 1 trillion to its current $ 16.2 trillion. In the Obama years alone, it rose from $ 6.3 trillion to $ 14.4 trillion.

In terms of debt expressed in terms of GDP, government debt rose 75 percent when Trump rose to 76.4 percent from the third quarter of 2018. As a contrast, that level rose from 47.5 percent at the beginning of Obama & # 39; s term to 75 percent when he went away.

The future, however, is what many economists are concerned with.

The most recent forecasts from the non-partisan Congressional Budget Office indicate that public debt will rise to 93 percent of GDP in the next 10 years, or the highest since shortly after the end of the Second World War. From there it is expected that by 2049 the level will be 150 per cent, which is much higher than what economists regard as a sustainable level.

Moreover, if the current tax policy remains in place, rather than sunset as they are intended to do, the debt burden will only get worse.

The main culprit of government debt is budget deficits, which have risen under Trump, although the CBO now expects the deficit to be a cumulative $ 1.2 trillion less than previous forecasts. The office estimates that the annual deficits start at $ 1 trillion in 1 2222, from an estimated $ 900 billion in fiscal year 2019.

The Trump government has said that economic growth will pay the extra debt and deficit, but so far this has not been the case despite the fastest GDP gains of the recovery.

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