Sunday, February 26, 2017

Trump falsely claims credit for debt drop - will he next claim responsibility for the tides?

NY Times

In a message posted on Twitter on Saturday, President Trump highlighted a dip in the national debt during his first month in office, contrasting it with an increase in the first month of the Obama administration.

Donald J. Trump ✔ @realDonaldTrump
The media has not reported that the National Debt in my first month went down by $12 billion vs a $200 billion increase in Obama first mo.

The numbers are broadly accurate, but the lack of attention to them is for good reason: Neither president bore responsibility for changes in the federal debt in his opening month in the White House. The slight decline cited by Mr. Trump — a drop of 0.06 percent, according to Treasury data — is a temporary fluctuation, not a change in direction.

The federal debt is determined by the government’s decisions about taxing and spending, and by the strength of the American economy. The debt was increasing rapidly in early 2009 because the economy was in free fall, and because of policy decisions made during the administration of President George W. Bush.

The debt is rising more slowly now because economic growth has strengthened and because of policy decisions made during Mr. Obama’s administration. But the debt is on a clear upward trend. The nonpartisan Congressional Budget Office estimated in January that the debt would increase by $559 billion in the current fiscal year, ending in September.

The exact amount of the debt bounces around that trend line because the Treasury borrows money by selling securities with maturities — or repayment dates — ranging from 28 days to 30 years. That creates an irregular pattern of inflows and outflows from the federal cash box.[...]

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, issued a statement applauding the president for focusing on the national debt while noting that “the improvement this early in his term has to do with normal fluctuations in spending and revenues rather than new policies he has implemented.” [...]

The national debt increased sharply during Mr. Obama’s first term as the government increased spending in response to the 2008 financial crisis. The debt grew more slowly during his second term as the economy improved and tax increases brought more money into the government’s coffers.

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