Federal debt is the total amount of money that the United States federal government owes to creditors. The government’s creditors include all individuals, businesses, governments and other organizations that own U.S. government debt securities. It’s one f the means of financing government operations exceeds the taxman collections. This debt can be acquired from within the nationals, from organizations/firms or can be an intergovernmental borrowing.
Before the Obama era the federal debt from his predecessor’s, John Bush era stood at 10.6 trillion. As at the moment the federal government stands at almost 18 trillion. This implies an increase of almost 8 trillion reflecting a percentage increase of 70%. This is seen as the worst debt increase in the last 43 sitting presidential terms. There has been a surge in total debt hitting 103 percent of gross domestic product.
The raise in national debt is attributable to various factors. Government engagements can be either discretional or discretional. Federal debt has mainly increased not due to discretional activities such as defense, education but rather from non-discretional spending involvement such as entitlement. The main entitlement programs include social security, Medicaid and Medicare. They account for up to almost more than 50% of federal spending and this is expected to increase with increasein population and as more people retire. This thus compared to other presidential terms to some extend explain the raising of the federal debt.
President Obama’s era, is perhaps seen a worst period of federal debt management. Raw figures clearly show a huge increase ever recorded in the recent past i.e. 70% increase in debt mainly attributable to mandatory engagements. It’s however true that some of this is due to spill-over effects from the previous era.