The Evolution of a National Burden – Part 5/7

The 16th Amendment was not the first time there was an American income tax. The financial requirements of the Civil War prompted the first American income tax in 1861. At first, Congress placed a flat 3-percent tax on all incomes over $800 and later modified this principle to include a graduated tax.

Congress repealed the income tax in 1872, but the concept as a source for funds did not go away.

In 1894, as part of a high tariff bill, Congress enacted a 2-percent tax on income over $4,000. The tax was almost immediately struck down by a five-to-four decision of the Supreme Court, even though the Court had upheld the constitutionality of the Civil War tax as recently as 1881.

In addition, Democratic Party Platforms under the leadership of three-time Presidential candidate William Jennings Bryan (1860 – 1925), however, consistently included an income tax plank, and the progressive wing of the Republican Party also supported the concept.

In 1909, progressives in Congress again attached a provision for an income tax to a tariff bill. Conservatives, hoping to kill the idea for good, proposed a constitutional amendment enacting such a tax; they believed an amendment would never receive ratification by three-fourths of the states. Much to their surprise, the amendment was ratified by one state legislature after another, and on February 25, 1913, with the certification by Secretary of State Philander C. Knox, the 16th amendment took effect. Source: Our Documents.gov

  • Then came World War I (1917 – 1921) that cost $20 billion (equal to $256.4 Billion in 2012)

By 1920, the federal debt was $22 billion (equal to $253 Billion in 2012). It would take ten years to pay that debt down to $16.2 billion ($221.92 Billion in 2012).

  • Next was World War II and the national debt grew to $43 billion by 1940. In 1950, after defeating Nazi Germany and Imperial Japan in 1945, the national debt was $257.4 Billion (equal to $2.451 Trillion in 2012).
  • The Marshall Plan to rebuild Europe after World War II cost the US $13 Billion (equal to $112 Billion in 2012). The Marshall Plan money was in the form of grants that did not have to be repaid.  The total of American grants and loans to the world, 1945-53, came to $44.3 Billion (equal to $381.9 Billion in 2012).
  • The Korean War (1951-1953) cost $30 Billion ($273.6 Billion in 2012). In 1953, the National Debt was $275.2 Billion.
  • The cost of the Vietnam War (1959-1975) was $111 Billion ($743 Billion in 2012). In 1975, the National Debt reached $576.6 Billion
  • The Persian Gulf War (1990-1991) cost $61 Billion ($102 Billion in 2012). By 1990, the National Debt reached $3.233 Trillion
  • The Iraq War (2003 to 2012) cost $715 Billion ($784 Billion in 2012 dollars) and still growing.
  • The war in Afghanistan has cost $583.3 Billion to November 10, 2012 and it isn’t over yet.

After World War II, the National Debt was reduced from 120% to 30% of GDP by 1981 when President Carter (1977 – 1981) left the White House. During that thirty-six year period (1945 – 1981), welfare spending in the US, including unemployment and workers compensation funded by taxes paid by workers and/or employers, cost $509.8 Billion and the federal government funded wars in Korea and Vietnam but still reduced the National Debt.

I repeat: under seven US presidents, Truman, Eisenhower, Kennedy, LBJ, Nixon, Ford and Carter, the National Debt was reduced from 120% (1945 at the end of World War II) of Gross Domestic Product to 30% of GDP by 1981.

Then Ronald Reagan was elected president.

Note: The Inflation calculator used  for this series of posts may be found at Dave Manuel.com, and the primary source for government spending was US Government Spending.com

Continued on December 7, 2012 in The Evolution of a National Burden – Part 6 or return to Part 4

Also discover Each President’s share of the US National Debt and learn more from the National Debt Info-Graphic by President 1945 – 2012

_______________________

Lloyd Lofthouse, a former U.S. Marine and Vietnam Veteran, is the award winning author of The Concubine Saga.

His latest novel is Running with the Enemy. Blamed for a crime he did not commit while serving in Vietnam, his country considers him a traitor. Ethan Card is a loyal U.S. Marine desperate to prove his innocence or he will never go home again.

And the woman he loves and wants to save was trained to hate and kill Americans.

To follow this Blog via E-mail see upper left-hand column and click on “FOLLOW!”

The Evolution of a National Burden – Part 4/7

The federal debt did not start with Presidents Ronald Reagan, H. G. W. Bush, G. W. Bush or Barrack Obama. The federal debt started in 1790 when the first Treasury Secretary, Alexander Hamilton, stabilized the dollar and refunded the debts incurred by the states fighting the Revolutionary War (1775 – 1783).

  • America’s first war cost $101 Million (equal to $2.52 Billion in 2012). The first federal debt caused by the revolution was 35% of GDP or $75.4 million ($1.885 Billion in 2012).
  • The War of 1812 (ended 1815) cost $90 million ($1.6 Billion in 2012).

By 1834, nineteen years later, the debt from America’s first two wars had been paid down to $33.7 thousand (equal to $886,984 in 2012).

  • Next came the Mexican War (1846 – 1849), and it cost $71 Million ($2.08 Billion in 2012).
  • The Civil War (1861 – 1865) pushed the federal debt to $3.2 Billion ($45 Billion in 2012).
  • The Spanish American War (1898-1899) cost $283 Million ($9 Billion in 2012)
  • The Philippine-American War also known as the Philippine War of Independence (1899-1902). During the suppression of this war of independence against the US, 200,000 to 1.5 million Filipino civilians were killed; there were 12,000 – 20,000 Philippine military casualties, and 4,165 US military dead. The US would not grant independence to the Philippine state until 1946. The cost of this war was $600 million (equal to $15.8 Billion in 2012)

To pay off debt and fund the growing pains of a nation becoming an expanding global empire, Congress passed the 16th Amendment to the Constitution on February 3, 1913 establishing Congress’s right to impose a Federal income tax.

Note: The Inflation calculator used  for this series of posts may be found at Dave Manuel.com, and the primary source for government spending was US Government Spending.com

Continued on December 6, 2012 in The Evolution of a National Burden – Part 5 or return to Part 3

Also discover Each President’s share of the US National Debt and learn more from the National Debt Info-Graphic by President 1945 – 2012

_______________________

Lloyd Lofthouse, a former U.S. Marine and Vietnam Veteran, is the award winning author of The Concubine Saga.

His latest novel is Running with the Enemy. Blamed for a crime he did not commit while serving in Vietnam, his country considers him a traitor. Ethan Card is a loyal U.S. Marine desperate to prove his innocence or he will never go home again.

And the woman he loves and wants to save was trained to hate and kill Americans.

To follow this Blog via E-mail see upper left-hand column and click on “FOLLOW!”

Each President’s share of the US National Debt

The series of posts on the National Debt keeps growing. I spent months researching the topic in an attempt to understand its history and evolution.

My first draft of this series of seven posts was at least three-times longer than the final copy. It is confusing enough, so I cut.

However, this morning I awoke wanting to know how much of the national debt each president and his congress was responsible for.

The reason I do not blame just the presidents is because each president submits the annual budget to Congress and Congress may add to or subtract from what the president requests. Then Congress must vote to enact the budget and the president signs it into law. Then there is the mandatory part of the budget and the discretionary portion. The president and Congress, without cooperation, cannot do much about the mandatory section of the budget such as Social Security.

For the sake of simplicity, I did not attempt to do the math to discover the exact amount each president (except G.W. Bush and Obama) is responsible for beyond his term in office, because if President Truman is responsible for $8.6 Billion of today’s $16.3509 Trillion national debt, then he is also responsible for the annual interest on that $8.6 Billion and the interest compounded annually on that interest for sixty years. If someone wants to figure that out, be my guest.  But first, you would have to know what the interest rate was for each year of those sixty years after Truman left office and the interest seems to change every three months.

For example, I found a post at Intellectual Take Out.org on the interest rates of the national debt starting in 1970 (you may notice that the interest rate has been as high as 14% and as low as 0.1%.  At the end of 2010, the interest was 1.7%).

Each President’s (and his Congress) share of the National Debt

  • Truman’s share of the National Debt was $8.6 Billion.
  • Eisenhower’s share was $5.6 Billion.
  • Kennedys share was $3.3 Billion.
  • LBJ’s share was $9.3 Billion.
  • Nixon’s share was $54.6 Billion.
  • Ford’s share was $48.4 Billion.
  • Carter’s share was $168.8 Billion.
  • Reagan’s share was $2.2376 Trillion.
  • G. H. W. Bush’s share was $1.143 Trillion.
  • Clinton’s share was $74 Billion.
  • G. W. Bush’s share was $6.3002 Trillion.
  • Obama’s share is currently about $2 Trillion.

THE DETAILS OF THE RESEARCH:

When Harry Truman became president (1945 – 1952), the National Debt from World War II was $260.1 Billion. The Interest on the debt during Truman’s term as president was $32.6 Billion. Truman was responsible for about $8.6 Billion of that interest.

The National debt Eisenhower (1953 – 1960) inherited from President Truman in 1953 was $266 Billion—an increase of $5.9 Billion. During Eisenhower’s term as president the interest on the debt was $44.8 Billion. Eisenhower was responsible for about $5.6 Billion.

The debt Kennedy (1961 – 1963) inherited from Eisenhower in 1961 was $292.6 Billion—an increase of $26.6 Billion. The interest on the debt during Kennedy’s years as president was $14.4 Billion.

The debt LBJ (1963 – 1968) inherited from Kennedy after his assassination in 1963 was $310.3 Billion—an increase of $17.7 Billion. The interest on the debt during LBJ’s years as president was $55.3 Billion. LBJ was responsible for about $9.1 Billion.

The debt Nixon (1969 – 1973) inherited from LBJ in 1969 was $365.8 Billion—an increase of $55.5 Billion. The interest during his term was $74.7 Billion. Nixon is responsible for about $11.2 Billion.

The debt Ford (1974 – 1976) inherited from Nixon in 1971 was $483.9 Billion—an increase of $118.1 Billion. The interest during his term was $70.9 Billion. Ford is responsible for $6.7 Billion.

The debt Carter (1977 – 1980) inherited from Ford in 1977 was $706.4 Billion—an increase of $222.5 Billion. The interest during his term was $160.5 Billion. Carter is responsible for about $40.9 Billion.

The debt Reagan (1981 – 1988) inherited from Carter in 1981 was $994.8 Billion—an increase of $188.4 Billion. The interest during his term was $910.6 Billion, and Reagan was responsible for about $360.2 Billion.

The debt G. H. W. Bush (1989 – 1992) inherited from Reagan in 1989 was $2.878 Trillion—an increase of $1.8832 Trillion. The interest during his term was $747 Billion, and he was responsible for about $71 Billion.

The debt Clinton (1993 – 2000) inherited from G. H. W. Bush in 1993 was $4.351 Trillion—an increase of $1.474 Trillion. The interest during his four year term was $1.6097 Trillion, and he was responsible for about $201 Billion.

The debt G. W. Bush (2001- 2008) inherited from Clinton in 2001 was $5.7699 Billion—an increase of $1.419 Trillion. The interest during his term was $1.291 Trillion, and he was responsible for about $234 Billion.

The debt Obama (2009 – ) inherited from G. W. Bush in 2009 was $11.8759 Billion—an increase of $6.106 Trillion. The interest during Obama’s first term in office was $833.0 Billion, and he is responsible for about $86.3 Billion.

In December 2012, at the end of President Obama’s first term, the National Debt had increased to $16.3509 Trillion—an increase of $4.475 Trillion.

However, President Obama inherited two wars. To be fair, the cost of those wars since he has been in office was subtracted from the total that he contributed to the national debt along with the interest that goes with the cost of the wars. Obama also inherited the 2007-08 global financial crises, and TARP funds were approved during G. W. Bush’s presidency so that amount was also added to Bush.

  • In 2009, the wars in Iraq and Afghanistan cost $155.1 Billion.
  • In 2010, the cost was $171.0 Billion.
  • In 2011, the cost was $170.7 Billion.

G. W. Bush’s Troubled Asset Relief Program (TARP) of October 2008 started out at $700 Billion but was reduced to $475 Billion by the Dodd-Frank Wall Street Reform and Consumer Act in July 2010, and President Obama signed it into federal law.

In addition, Fact Check.org says, “The truth is that the nearly 18 percent spike in spending in fiscal 2009 — for which the president is sometimes blamed entirely — was mostly due to appropriations and policies that were already in place when Obama took office.

“That includes spending for the bank-bailout legislation approved by President Bush. Annual increases in amounts actually spent since fiscal 2009 have been relatively modest. In fact, spending for the first seven months of the current fiscal year is running slightly below the same period last year, and below projections.

“Obama can be fairly assigned responsibility for a maximum of $203 billion in additional spending for that year. (2009).

“It can be argued that the total should be lower. Economist Daniel J. Mitchell of the libertarian CATO Institute — who once served on the Republican staff of the Senate Finance Committee — has put the figure at $140 billion.

Total spending for G. W. Bush’s last two budget years was $2.9825 Trillion for 2008 and $3.5177 Trillion for 2009 (President Bush requested $2.7 Trillion, but Congress enacted $3.518 Trillion).

For 2010, President Obama requested $3.552 Trillion, and Congress enacted $3.721 Trillion. For Revenue, Obama requested $2.381 Trillion, and Congress enacted $2.165 Trillion,

In 2011, Obama requested $3.834 Trillion, and Congress enacted $3.630 Trillion. For Revenue, Obama requested $2.567 Trillion, and Congress enacted $2.314 Trillion.

In 2012, Obama requested $3.729 Trillion, and Congress enacted $3.796 Trillion. For Revenue, Obama requested $2.627 Trillion, and Congress enacted $2.469 Trillion.

In conclusion, President Obama requested $667 Billion in revenues that Congress did not enact and Congress spent $32 billion more than Obama requested for 2010 – 2012. One could argue that Congress was responsible for $699 Billion in spending for those years—not President Obama.

Who do you think contributed the most to the National Debt?

Note: The primary source for government spending was US Government Spending.com and the US Government Printing Office

Start with The Evolution of the National Burden – Part 1

_______________________

Lloyd Lofthouse, a former U.S. Marine and Vietnam Veteran, is the award winning author of The Concubine Saga.

His latest novel is Running with the Enemy. Blamed for a crime he did not commit while serving in Vietnam, his country considers him a traitor. Ethan Card is a loyal U.S. Marine desperate to prove his innocence or he will never go home again.

And the woman he loves and wants to save was trained to hate and kill Americans.

To follow this Blog via E-mail see upper left-hand column and click on “FOLLOW!”