Chart Of The Day: America's Debt Crisis - Who Really Is Responsible?

Tyler Durden's picture

Yesterday we brought you the news that US debt quietly soared by $90 billion overnight to celebrate the new fiscal year end, reaching $16.2 trillion and sending total US debt to GDP to 103%. Needless to say, this comes at an exciting time, with the first Wall Street muppet presidential debate in about 12 hours, where the US debt crisis will be a front and center topic because in about 2 months, the US debt ceiling will again be breached adding to the Fiscal Cliff fiasco, resulting in a flashback to August 2011 when the market had to tumble by nearly 20% for Congress to get the hint that first and foremost its job is to make sure the money on Wall Street keeps flowing, all else secondary. And while it has become fashionable to say that US debt rose by this much under that president, the truth is that the Presidency is merely one of three institutions that are responsible for the shape of the US debt-to-GDP line (which is now going from the lower left to the upper right by default). The other two are, of course, Congress and the Senate. Luckily, to simply things substantially, we have a handy graphic from today's Bloomberg Brief which conveniently plots not only the political affiliation of the presidency, but of the House and Senate, in the chronology of the US debt crisis.

From BBG Brief:

The U.S. debt ceiling and impending fiscal cliff are likely to be important topics at tonight’s presidential debate.


If the government fails to reach a deal to avoid all or part of the $607 billion fiscal cliff by the end of this year, the U.S. economy is at risk of being thrust back into recession in the first half of next year.


A rapidly increasing U.S. debt load, approaching the $16.4 trillion debt ceiling, amplifies potential downside risk. In 2011, failure to raise the debt ceiling led to the first ever downgrade of the U.S. by Standard & Poor’s.


This year, U.S. debt has increased by an average monthly 0.6 percent. If this trend persists, the current debt ceiling may be breached as soon as January, risking additional downgrades and substantial volatility in global financial markets.


The MSCI World Index dropped almost 20 percent between April 18, 2011, when Standard and Poor’s placed the U.S. on negative outlook, and Oct. 4 2011, its year low; 30-day volatility rose to 29.4 from 14.6 during the same period.


The U.S debt ceiling has been raised 17 times since 1995 by an average of 8.5 percent. Four of those increments came during Bill Clinton’s presidency, averaging 9.5 percent. An additional seven increases occurred during President George W. Bush’s time in office, averaging 9.6 percent. Since President Obama took office, the debt ceiling has been increased on six occasions, by an average of 6.5 percent.

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Thomas's picture

We are heading for $17 trilion so unbelievably fast. Kotlikoff says the unfunded liabilities are now $220 trillion, which is up from $44 trillion when I first started paying attention to him. This is not the beginning or the beginning of the end. This is heading for the end of the end because exponential functions blow up very, very quickly at the end. 

Badabing's picture

 America's Debt Crisis - Who Really Is Responsible?

Our children?

GetZeeGold's picture



Pay up Johnny!


I'm gonna have to confiscate that turkey'll have to eat the crap we've approved for lunch. Sorry Amigo.....them's the rules.



JPM Hater001's picture

I have encouraged my children to no longer participate in the system.

Of course at 10 and 11 that doesnt do much but I dont think there is any harm in unplugging early.

Dalago's picture

Inflation will hit when the US gov't kicks the can down the road by raising their debt at the end of this year.  The People are hemorrhaging with 0 jobs and under employment with lower wages.  So The People's economy is slowing but fascist bitchez don't want that.  Significant movement is at a high/holistic/sovereign level.  Its just easier to control that way.

Pinto Currency's picture


Congress is responsible for creating the Federal Reserve - an institution that sets monetary and debt policy (interest rates) - and giving its ownership, ultimately, to a group of psychopathic bankers.

And the bullion banks along with the Fed are responsible for rigging the price of gold and forcing interest rates so low for decades that a debt fueled series of bubbles resulted (and continue).

In the end, the bubbles popped, the debt remains as well as the bloated government structure that appeared sustainable during the bubble years.  Eveyone now screams about the fiscal cliff.  It's the collapsed bubble and failed bank-controlled fiat debt money system we should be shouting about.

markmotive's picture

Growth is a temporary (250 yr) phenom.

Thererfore, credit growth is a temporary phenom.

Therefore, the system is a temporary phenom.

Paul Bogdanich's picture

In reading the posts the ignorance is astonishing.  Under Clinton defense spending went under 40% of the budget as a result of the base closure comission and other reforms of the early 1990s.  Had the person who prepared the graph in the article gone back to 1990 (Clinton was elected in 1992) instead of truncating the graph at 1995, that effect would have been obvious but we awnt to hide that of course so we truncate the graph at 1995.  Under Bush the defense share went to about 56% with the Iraq fiasco.  Under Obama 53% as the expansion of the GWOT is tremendously expensive in particular the drones.  Maintaining an empire is expensive to the poitn where it is killing us as a nation and so long as all the candidates for national office are in absolute agreement that we need to maintain the empire nothing will change and we will go bankrupt.  Just like the Soviet Union in the 1990s.  However, reading these comments its embarrasing how ignorant people are about the cause of the deficits.  I guess all yalls just stupid.  So when they come to cut your social security, eliminate your tax credits, raise your tax rates, decrease your deductibles, impose a national sales or VAT tax and so on all so they can pay for the defense budget (remeber both republicans and deomcrats are in absolute agreement that we need to maintain the empire at all costs) what are you going to say then?  Bloodthirsty and stupid is a dangerous combination but that pretty much describes the population of the United States I'm afraid.          

Watauga's picture

Paul--I agree with the majority of your post, but want to be clear that defense spending is (1) one of the extremely limited, valid functions of central governemnt, and (2) the ridiculous explosion of debt since 2008 is NOT attributable to defense spending, but to the Democrats efforts to buy votes through government giveaways, whether to unions, cronies, or welfare/foodstamp recipients.  Clearly, when the Democrats controlled both houses and the White House, the steady rise became an explosion of extraordinary and irreparable proportions.  We are toast, and it is due to the Statists (mostly Democrats).

BLOTTO's picture

Society demands us to participate in this fuckin PAGAN horseshit.

Try going against the herd mentality and you will be met with fierce resistance from the masses.

The holidays - the calendar in general - rules us commoners.


Get up at 6:30am to the damn alarm clock you wanna smash with your fist - to work 5 out of 7 days of the week - but have the philosophy 'moderation in life'...yea - moderation except for fuckin work...

Go to a job you cant stand and do shit u dont like and be with people you wouldnt otherwise associate have all your hard work and savings in the bank account lose more money then gain in be stressed about the day-to-day activities at work, life, relationships, go home, eat, wash, shave and shit...and go to bed tossing and turning and sweating liek a pig... get ready to do it all over again - for 30 years...then retire...and enjoy 1-2 years of your pension before u fucking turn over and have a fucking stroke/heart attack from 30 yrs of bulshit...

And than at the end of it all - have the grateful attitude that you've succeeded...that - we made

You know what?

-Go and fuck yourself.

Rant is done.

GetZeeGold's picture




Dude you just totally pissed off 47% of everyone here.....good job!

Gully Foyle's picture


"Try going against the herd mentality and you will be met with fierce resistance from the masses."

Yep, like posting common sense here.

Joe Davola's picture

Where do I sign up for your newsletter?

Taint Boil's picture



That was awesome ....

SubjectivObject's picture

Bob Dylan has it

The big dumb blonde

With the wheel gorged
Turtle, that friend of hers
With his checks all forged
With his cheeks in a chunk
With the cheese and the cash
They’re all gonna be there
At that million dollar bash
Ooh, baby, ooh-ee
Ooh, baby, ooh-ee
It’s that million dollar bash

Ev’rybody from right now
Is over there and back
The louder they come
The bigger they crack
Come now, sweet creams
Don’t forget to flash
We’re all gonna meet
At that million dollar bash
Ooh, baby, ooh-ee
Ooh, baby, ooh-ee
It’s that million dollar bash

Well, I took my counselor
Out to the barn
Silly Nelly was there
She told him a yarn
Then along came Jones
Emptied the trash
Ev’rybody went down
To that million dollar bash
Ooh, baby, ooh-ee
Ooh, baby, ooh-ee
It’s that million dollar bash

Well, I’m hittin’ it too hard
My stones won’t take
I get up in the mornin’
But it’s too early to wake
First it’s hello, goodbye
Then push and then crash
But we’re all gonna make it
At that million dollar bash
Ooh, baby, ooh-ee
Ooh, baby, ooh-ee
It’s that million dollar bash

Well, I looked at my watch
I looked at my wrist
I Punched myself
In the face with my fist
I took my potay toes
Down to be mashed
Then I made it on over
To that million dollar bash
Ooh, baby, ooh-ee
Ooh, baby, ooh-ee
It’s that million dollar bash

Read more:
tip e. canoe's picture

i had the unfortunate opportunity to visit a Walmart (for the 3rd time ever) this last weekend.    they had the xmas trees already set up in the back ready to go for the subtle hint after being bombarded with halloween costumes & candy.

commerce has completely co-opted the calendar through conspicuous consumption, or rather it has always been a tool of commercial control.   that sick bastard pope Gregory has to be chuckling in his crypt.

Meremortal's picture

I see. Having to work is your real problem. Poor baby.

mayhem_korner's picture



His problem is having to work but having the fruits of his labor unduly confiscated and re-distributed to others.  And like so many, he's stuck (coerced?) there because the debt-driven system has imposed so many barriers to going it on one's own.

foodstampbarry's picture

Yeah, you just pissed me off! I'm going to go take the dog for a walk now - not gonna clean up his shit and gonna tell the first person I see to fuck off. Thanks for setting my mood.

GetZeeGold's picture



Pretty sure that's not against the law.........yet.

A Lunatic's picture

I hope you can find your way off the beaten path and find the peace and joy of a simple life. I hope we all can.........

Sockeye's picture

Superb rant, and shared sentiment.

newworldorder's picture


Better not bring that attitude to work. Only happy people tow-ing the company line are allowed. Just remember, there are millions of your fellow citizens waiting for your job if you are not happy, happy, happy.

(sarc off)

Watauga's picture

Try doing all of that to build a successful business, only do it 7 days per week for 12-14 hours per day, then watch your filthy, no-good, lying, sack-of-crap Caesar tell you that "you didn't build that."

RockyRacoon's picture

You believe he said that because you want to.  You need to.  Otherwise, you'd have to look in the mirror for the culprit.

Gully Foyle's picture

JPM Hater001

"I have encouraged my children to no longer participate in the system."

So you and the kids became beggars in India?

SubjectivObject's picture

You mean if they're not trigger happy vidiots,

Or phone crazy social fluffties,

It's India for them?

Small bipolar world you gots there.

Gully Foyle's picture


You know the approved crap is healthy, like most of the Organic assholes promote here.

The problem is it's a one calorie fits all and doesn't take into account active kids.

Recent articles at Hot air and Ace of Spades discussing this.

GetZeeGold's picture



Thought it went without saying actually.

Gully Foyle's picture


Which part?

Michelle kicked off the healthy foods thing so no more junk in school lunchs.

But it's limited calorie diet.

So the kids who need more food, the active ones like athletes, can't get it from the approved lunch.

The heavy hand of BIGOV fucked up once again.

GetZeeGold's picture



 Which part?


Whatever you want........just keep rolling.

5880's picture

What idiot starts this chart in 1995?

Correlate it also to who voted for which entitlement programs

Full span chart here

Taint Boil's picture



One of my favorite charts - of course it doesn't show congress or senate but still worth a look. It really doesn't matter who is president, the president has very little power by design.

sdmjake's picture

That's a big build up...gonna need an even bigger war to fix it this time.

At that rate, next thing you know the TSA and SSA gonna have to buy billions worth of hollowpoints...oops...

mayhem_korner's picture



The war is already big, and it will be enormous in scale and reach.  It will be very unclear who is fighting who, though...

Kobe Beef's picture

We are at war with Eurasia, er- Eastasia. Doesn't matter, Ignorance is Strength.

Stock Tips Investment's picture

Clearly debt has been growing very rapidly, especially after 2003. Blame can be a very interesting exercise, but that does not help us out of this problem. I think we should focus on the consequences that generated this huge debt. More importantly, is to focus on finding the solution to this problem. Every day, more people believe that the Fed's plan and liquidity are the solution to the economic crisis. Efforts to reduce the government deficit are very shy. While there is a deficit, the need to continue with more debt finance. It's like trying to put out a fire, throwing more fuel. However, the population, mostly, is not aware of the risks.

newworldorder's picture

Most people dont know shit or dont give a shit about the debt. Like most things they cant control, - Its somebody else's problem.

Gully Foyle's picture


Fuck the children!

You raise the little bastards and all they want to do is dump you in a home.

JustObserving's picture

Here are the details on US unfunded liabilities (fiscal gap) per Laurence Kotlikoff and Scott Burns:

The U.S. fiscal gap, calculated (by us) using the Congressional Budget Office’s realistic long-term budget forecast -- the Alternative Fiscal Scenario -- is now $222 trillion. Last year, it was $211 trillion. The $11 trillion difference -- this year’s true federal deficit -- is 10 times larger than the official deficit and roughly as large as the entire stock of official debt in public hands.

This fantastic and dangerous growth in the fiscal gap is not new. In 2003 and 2004, the economists Alan Auerbach and William Gale extended the CBO’s short-term forecast and measured fiscal gaps of $60 trillion and $86 trillion, respectively. In 2007, the first year the CBO produced the Alternative Fiscal Scenario, the gap, by our reckoning, stood at $175 trillion. By 2009, when the CBO began reporting the AFS annually, the gap was $184 trillion. In 2010, it was $202 trillion, followed by $211 trillion in 2011 and $222 trillion in 2012.

Part of the fiscal gap’s growth reflects changes in policy, such as the Bush and Obama tax cuts, the introduction of Medicare Part D, and the expansion of defense spending. Part reflects “natural” growth of existing programs, including growth in Medicare and Medicaid reimbursement rates. And part reflects the demographic time bomb U.S. politicians are blithely ignoring.

Unfunded liabilities are currently $1.94 million per taxpayer.


Coldsun's picture

Fuck that, I'm out. Where can I get my Obama phone?

RockyRacoon's picture

That would actually be a Reagan phone:

“The free Obama phone is an important program, especially for low income families that would otherwise not have access to basic communications,” the homepage of reads.

The site does, however, clarify that Obama did not start the program and that there's no such thing as an "Obama phone."

"It’s true that government provides free cellphones to the poor and disabled people," the site reads. "But the Obama part is not true as Obama didn’t initiate this program. It’s on the run [sic] since the administration of Reagan."

Read more:

Gazooks's picture

Beginnings and ends are cyclical measures of subjective linear perceptions in transitional space/time continuum.

Beginning to see an end implies transition to subsequent beginning and vice versa.

Observable velocity of transition is subjective to positional perspective.

Stack and get the fuck out of the way.


DavosSherman's picture

I emailed Kotlikoff because I didn't understand the math (83t +16t+21t=120t) [Medicare, Social Security and Prescription Drugs].  He said he carried them forward.

John Williams and Bill Gross use NPV and come up around 66t-75t.

Anyway we look at it, "it" is a mess with the Enron off balance sheet Arthur Shithead Anderson bullshit fucking accounting.

PD Quig's picture

Sorry, but this graph is too simple-minded. The seeds of the debt problem were sown with the creation--and acceleration--of entitlement program benefits into the teeth of the Baby Boomer retirement bulge. It is all about the unfunded liabililties in Medicare and Social Security. You can throw in some wars and tax rate reductions that were 'not paid for', but the real problem is spending, not revenues. Even Clinton era surpluses were actually far smaller--because they began to add what was then a Social Security "surplus" into the overall budget numbers in the mid-1990's. Now that SS is cash flow negative the real fun begins...hence Obama's $1T deficits as far as the eye can see.

The End. My only friend, the End. It is coming and it will be bracing. Ammo-up, my precious.

gckings19's picture

The baby boomer genreation has destroyed this country....i hate them and i blame them for everything.

LMAOLORI's picture



You must have had some pretty shitty parents you should seek help