Saturday, February 07, 2009

The Haunting Ghosts of Bushenomics

Apparantly, the Bush administration overpaid for the Bank bailout to the tune of 78 billion dollars.

Broken down, that's $260 per American citizen handed over to the banks, just because, well, they screwed up.

For a family of four, they're on the hook for about a grand to pay for Bush's latest screwup.

Not that it's a big deal. With a ten trillion and soaring National debt, a thousand bucks is a drop in the bucket compared to the $130,000 each American family owes toward the national debt, assuming it could be paid off right now.

If Americans were to merely keep the debt at bay with interest payments, and assuming interest was stable at 5%, that family would pay

$6,500 per year.

Here's a graph to show the history of the US debt, since 1938.




Broken down, here are the numbers of who has been responsible for what.

For the sake of argument, I've mostly put the first year in office per president on the previous administration's bill.

Presdient

term

debt

Approx.

Interest owed

Interest adjusted


increase

Bond Yield

for term

(deficit)/surplus


Nixon/Ford

69-77

700 billion

6.50%

130 billion

(570 billion)

Carter

78-82

350 billion

12%

516 billion

166 billion

Reagan

82-90

2.8 trillion

7.50%

940 billion

(1.86 trillion)

Bush I

90-94

1.8 trillion

5.50%

670 billion

(1.13 trillion)

Clinton

94-02

1.2 trillion

5.50%

2.67 trillion

1.47 trillion

Bush II

02-10

5 trillion

4.50%

2.7 trillion

(2.3 trillion)




I could crunch the numbers for days, coming up with historical interest rates, how much each president added to the debt vs how much they had to pay in interest.

To make this easy, I've estimated the average interest rates during various presidents since Nixon, which is really when the US Federal debt started increasing at a dramatic rate.


Here's the graph I used for my interest rate estimates. The purpose of this estimation is to break down how much each president was on the hook for, based on the 10 year US T-note yield. The chart above breaks each leader's debt down into interest from previous debt, vs debt they accrued by overspending.





Based on these interest corrected figures, lets add up the total budget management by Republicans vs Democrats.


Republicans - 5.86 trillion deficit

Democrats - 1.63 trillion surplus

Interest on previous debt - 7.596 trillion

Other statistics: over 90% of the debt came from three leaders whose reign lasted 20 years, Reagan, Bush, and Bush jr.





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