If you asked the average person if the national debt increased more during the first Trump administration or the Biden administration, I would guess that nine out of ten people would be certain it was the latter. However, as with most issues, the reality is considerably more complicated and nuanced than popular political narratives.

The first complication is when to start the clock.  Presidential terms run from January to January for four years. But the incoming president inherits a lot of fiscal baggage from the previous one.  To keep the math simple, I looked at the national debt as of the first day the new president was sworn in.

According to the Treasury Department, this was the national debt on those dates.

So, Biden did indeed add about $588 billion (+7%) more to the national debt than Trump did in his first term. However, as a percentage, Biden only increased the national debt by 30%, compared to a 39% increase for Trump.

Most economists agree that the ratio of national debt to gross domestic product (GDP) is a more important gauge of our national debt.  Unfortunately, this ratio has increased rapidly over the last forty years.  Before 1984, it never exceeded 40% except during wartime.  However, after 1984, it began to rise gradually.  The only administration to actually reduce the ratio since WWII was the Clinton administration, which saw the ratio decline slightly from 61% to 57%.

It rose to 77% during the Bush 43 administration but then skyrocketed during the Obama administration, ending at 103%, which Trump inherited when he took office. It was the first time since WWII that the ratio exceeded 100%.

The ratio gradually drifted higher during the first three years of the Trump administration. While the debt continued to rise, economic growth mostly kept pace. By the end of 2019, the ratio had grown to 107%. So, even in relative terms, Trump did little to make good on his campaign promise to pay off the national debt.

Then came COVID and the federal government's massive response to it. In 2020 alone, a staggering $4.5 trillion was added to the national debt, the highest amount ever recorded in a single year.  By the end of 2020, the national debt had nearly reached $28 trillion.  During that year, the U.S. experienced an astonishing debt-to-GDP ratio of 132% before ultimately settling at 124% by the end of Trump’s first term.

In the first years of the Biden administration, it appeared that we might be headed back to some fiscal sanity as the deficit was cut by more than half and the debt-to-GDP ratio retreated to 116%. Still, another $3.7 trillion was added in 2021 and 2022.

But then, heading into the 2024 elections, Biden and the Democrats went on a spending binge, adding $4.8 trillion to the debt in 2023 and 2024, driving the debt-to-GDP ratio back to the nose-bleed level of 128%. Considering that the economy had largely recovered from the pandemic, that kind of fiscal stimulus made no economic sense and worked at cross purposes to the Federal Reserve’s efforts to reduce inflation.

For those worried about the national debt, there is little reason for optimism in the records of either Trump or Biden. However, in the 2024 election, I believe the American people largely overlooked Trump's fiscal record, viewing it as a necessary response to the pandemic. In contrast, they were unwilling to excuse Biden and the Democrats for the continued high spending levels and the likely impact that had on inflation. I believe this was one of the major factors in their 2024 loss.

I think it is also why you continue to see fairly good support for DOGE, even though there is some concern about its chaotic and haphazard approach. Only time will tell whether Trump can improve on the fiscal record of his first term. So far, I see little reason for optimism.  The idea that we will balance the budget with tariffs is nonsense.  While I am sure there is plenty of waste and fraud in the federal government’s expenditures, and I applaud rooting it out, I seriously doubt whether enough will be found to make much of an impact.

The plain fact is that the U.S. is caught, like much of the developed world, in a demographic vise. Social Security, Medicare, and Medicaid make up almost half of federal expenditures. These programs must be structurally reformed.

And there are solutions. We need to find ways to tax America’s underground economy, which some estimate is perhaps 10% of GDP.  We need a rational immigration policy to bring the workers we need to grow the economy, which will, at the same time, prop up Social Security. But until we begin having these kinds of serious conversations, as opposed to wielding chainsaws for clickbait, we are doing little more than rearranging deck chairs on the Titanic.