Just a brief followup on this post, addressing a topic raised briefly at the end of it, which was a question as to why US debt grows faster than the annual deficits.
The table can be found here at US Debt vs Deficit table, 1929-2020, of which a partial section (2007-2020) is taken.
As you can see, the annual increase in debt is not linked directly to the annual deficit. Even in years like 2000 and 2001 when the US ran (technical) surpluses, the debt still increased.
There are a number of reasons for this, but this is a big one.
The deficit has been less than the increase in the debt because Congress began borrowing from the Social Security Trust Fund surplus in 1987. The surplus was created by the baby boomer generation. They contributed more because there were more working people than retirees during their peak working years.7
Their payroll tax contributions were greater than Social Security spending. That allowed the fund to invest the extra revenue in special Treasury bonds. Congress spent some of the surplus so that it wouldn’t have to issue as many new Treasury notes.
Both Social Security and Medicare/Medicaid are going to go into the red in the next few years so that source of “borrowing” will vanish.
But what it really comes down to is that the US has simply deliberately decided to not pay down the debt, instead rolling much of it over as interest rates dropped to zero or near-zero. That will not be the case forever, which means this chart cannot go as it has.
Ha! In searching through my bookmarked articles I came across this gem from 2011.
No Minister 
Tom,
Thanks for providing the forum on the federal debt issue. The table provides many of the reasons why debt is larger than the deficit. It is also the case in NZ. Often revaluations of government assets will lead to an accounting surplus but a cash deficit. The gap has to be borrowed.
I am not convinced that the social security trust fund can be a major reason. Not unless the federal government can treat the raid on the fund as revenue in the same manner as tax revenue. Otherwise it is just borrowing from the fund, which would be treated as federal borrowing. Something similar used to happen in NZ before the Fiscal Responsibility Act. The government used the surplus in ACC to fund general government expenditure.
I would point out to Rossco that I was also the Science and Innovation Minister and Associate Economic Development Minister. That meant I was within the Cabinet Economic Team.
Wayne, it was a joke, chill bro.
Repartee.
But nice response
Cheers Rossco
I have not looked into the issue for some years (bookmarked somewhere) but as I recall the Social Security surpluses were the reason for the overall surplus in Clinton’s last two years, but because any excess money the SS fund has must also be invested in US debt instruments (meaning Treasury bonds I’d guess) that means the debt would go up, even though a chunk of it is inter-government debt rather than public debt.
Here we go: two superb articles from 2008:
The Myth of the Clinton Surplus Part 1 and Part II.
There’s a lot of detail there and it turns out there are other “trust funds” that were running surpluses at the time but the essential point is the one I made.
I did like the following from the first article in relation to your comment that Not unless the federal government can treat the raid on the fund as revenue in the same manner as tax revenue.
Whatever the case may be, there was only one man in living memory who tried to address the spending:
Newton Leroy Gingrich.
And what did he get for his efforts ? A barrage of ethics complaints from a hard left nut-job named David Bonior, Democrat, Michigan – he did it because the Democrats were trying to get Newt removed from office because he had removed the Democrats from power in 1994. Gingrich eventually paid a $300k fine, not because he was guilty of anything, but because he was advised to pay it because he was being driven into the ground financially. An early example of the Democrats use of “lawfare”.
I always laugh at the stuff about “The Clinton Surpluses” when it was actually down to the GOP controlling the House from 1994 and forcing him to accept lower spending than he (and the Democrats) wanted.
Same with “The Bush Deficits” and “The Obama deficits”, as if budgets and spending are not actually under the control of Congress, especially the House. It would be much better to track all this stuff on charts of GOP vs Democrat control of Congress.
President Andrew Jackson waged a war on US banks in 1830’s, and won. He was a Democratic-Republican. But, whom would want the modern millstone of debt. Wouldn’t matter your bag of political tricks. Whatever president, whatever party, its a divide by zero error. The “banks” would gut any president, prime minister, premier, king whom threatened to end the cocaine debt party. The ruler versus banker conflict has been going on forever. The Medici were first destroyed by unpaid debt. The Fuggers were next. Next will be the Rothschilds.
When the unpayable debt comes due, either the bankers will need to go down, or the tyranny will come down on the people. This is pretty much the case world wide. But I think it is happening now. The tyranny bit.
You need to sort out your who from your whom.