Presidents and the National Debt

Here's a summary of the national debt increases under the last five U.S. presidents:

1. Joe Biden (Democrat): As of April 2024, the national debt has increased by approximately $6.17 trillion since he took office in January 2021.

2. Donald Trump (Republican): The national debt grew by about $8.18 trillion during his presidency which included COVID relief initiatives.

3. Barack Obama (Democrat): The national debt increased by $8.34 trillion during his two terms from 2009 to 2017.

4. George W. Bush (Republican): The national debt rose by approximately $5.85 trillion during his presidency from 2001 to 20092.

5. Bill Clinton (Democrat): The national debt increased by about $1.4 trillion during his two terms from 1993 to 2001.

Deficit spending can play a crucial role in a growing economy, but its necessity depends on various factors and economic perspectives.

Key Points to Consider:

1. Stimulating Economic Growth: Keynesian Economics: This school of thought argues that deficit spending is essential during economic downturns to stimulate demand and boost growth. By increasing government spending, the economy can be “kickstarted,” leading to higher growth and eventually higher tax revenues. Monetary Expansion: Some economists believe that in an expanding economy, the money supply should grow, which can be achieved through government deficit spending.
2. Utilizing Unused Savings: Government borrowing can utilize unused private sector savings, promoting higher economic activity and growth.
3. Potential Downsides: Crowding Out: Critics argue that deficit spending can crowd out private investment by increasing interest rates, making it more expensive for businesses to borrow. Long-term Impact: Persistent deficits can lead to higher debt levels, potentially burdening future generations and affecting long-term economic stability. Alternative Reserve Currency: The US Dollar has been the reserve currency for over 50 years, this is in jeopardy when debt burdens grow beyond capacity. A competitor is growing with China and the conglomerate BRICS countries.

BRICS Pay

The BRICS nations (Brazil, Russia, India, China, and South Africa) are developing an alternative payment system called BRICS Pay. This initiative aims to facilitate cross-border transactions among member countries, reducing reliance on the traditional SWIFT system and the US dollar.

Key features of BRICS Pay include:

• Integration of local currencies: This allows for trade settlements in national currencies, promoting financial independence and reducing currency exchange risks.
• Blockchain technology: The system leverages blockchain for secure, real-time transactions, enhancing transparency and efficiency.
• Financial inclusion: By making transactions more accessible and cost-effective, BRICS Pay aims to support broader economic participation.

The system is expected to be launched soon, with significant interest from over 150 countries. This could have substantial implications for global trade and financial dynamics.

While deficit spending can be beneficial, especially in stimulating growth during economic slowdowns, it must be managed carefully to avoid long-term negative impacts. This extends to armed conflicts and political unrest if not adequately managed. Balancing short-term economic needs with long-term fiscal responsibility is key to a stable and secure fiscal future.