Guest post by Joe Hoft
In spite of the fact that President Trump took over with nearly $20 trillion of debt and the related interest payments on the debt, and in spite of the Federal Reserve (FED) increasing interest rates by a full one percent since the 2016 election, President Donald Trump’s debt is half that of Obama’s.
The US Debt since President Trump was inaugurated on January 20th, 2016 through March 1, 2018, increased by $927 billion. On inauguration day the debt was at $19.9 trillion and on March 1, 2018 the debt stood at $20.8 trillion.
Although $927 billion is a lot of money added to the debt, it is half of what President Obama added during the same time frame in his first year plus in office.
Where President Trump increased the Debt to date by only 4.6% , Obama increased the debt by 17.7% or 13.1% more than President Trump.
President Obama inherited a US Debt amount of $10.6 trillion on his inauguration and increased it by almost $1.9 trillion by March 1, 2010. Obama increased the US Debt amount by $954 billion more than President Trump in the same respective time in office. In addition, President Trump has been able to limit the amount of new debt in spite of the massive increase in debt from Obama ($10 trillion) and the rising interest rates initiated by the Fed.
Right after Barack Obama was elected President, on December 16, 2008, the Federal Reserve (The Fed) lowered the Fed Funds rate by an entire percent, from 1% down to 0% . The Fed had not lowered the Fed Funds rate by such a large amount (1% ) since at least before 1990, if ever. The Fed kept this 0% rate for most of Obama’s eight years in office.
CNBC reported in December 2015 that President Obama oversaw “seven years of the most accommodative monetary policy in U.S. history” (from the Fed). The Fed Funds rate was at zero for most of Obama’s time in office. Finally, in December 2015 the Fed announced its first increase in the Fed Funds rate during the Obama Presidency.
The only Fed Funds Rate increases since 2015 were after President Trump was elected President. The Fed increased the Fed Funds Rate on December 14, 2016, March 15th, 2017, June 14, 2017 and again on December 13, 2017. Four times the Fed has increased rates on President Trump after doing so only once on President Obama late in his 2nd term.
Increases in the Fed Funds Rate increase the cost of borrowing. With $20 trillion in debt, a 1% increase in interest payments equals $200 billion in annual interest payment increases.
President Obama benefited from the lowest possible interest rates possible for most of his eight years and in spite of this, nearly doubled the US Debt from $10 trillion to nearly $20 trillion.