In 1946, the United States was recovering from World War II. Many products that fueled the American economy, redirected toward the war effort, had yet to recover in a post-war world. And the war had been expensive.
It's understandable then, that 1946 produced a record 106 percent federal debt to gross domestic product (GDP) ratio. That record has stood, as have those of the years immediately after WWII, for over 50 years.
In 2018, we're not involved in a world war. We aren't recovering from a world war that redirected vast amounts of American industry and workers toward production of materials for a war effort.
But in 2018, we're on track to beat those post WWII debt records.
That projection comes from the Congressional Budget Office (CBO).
The national debt is on track to nearly double as a share of the economy over the next 30 years, according to a new… https://t.co/EaVZ1Xfz63— NBC News (@NBC News)1530053406.0
ICYMI: America's debt is headed for the highest levels since World War II. Current debt-to-GDP level = 78% (highes… https://t.co/higOy0PICc— Heather Long (@Heather Long)1530109849.0
The CBO, a nonpartisan resource for budget and economic information, reports by the end of 2018, the USA's debt to GDP, a measurement of the US economy, will reach 78 percent. The last time our debt reached that level was 1950 during the recovery from WWII.
And by 2028? America is headed for 96 percent debt to GDP with a trajectory to exceed that 1946 high of 106 percent.
But why, when we're not in a war recovery cycle, would our debts soar so high, eventually eclipsing our economic growth?
Remember the Republican tax plan that President Donald Trump and GOP leaders Paul Ryan and Mitch McConnell pushed? Recall the GOP tax plan, giving tax cuts to corporations and the highest income brackets, that would pay for itself and bring industry back to the United States and create jobs?
Turns out, it was not as advertised according to the many financial analyses done before and after Trump's tax cuts took affect. Turns out the dire warnings about what those tax cuts for the wealthiest and most profitable would do, they actually are doing.
I thought the tax cuts were going to pay for themselves. https://t.co/46nCc6LpwZ— Tom Colicchio (@Tom Colicchio)1530105878.0
The economy has continued to climb at the levels projected during the administration of President Barack Obama, where the deficit shrank again after growing under President George W. Bush who took over a shrunken deficit courtesy of President Bill Clinton.
In fact, despite the fiscally conservative rhetoric of Republicans, their watch produced the largest deficit growths while Democratic presidents have shrunk the deficit, going back to President Ronald Reagan.
Unfortunately the economic upturn inherited from Obama can't outdistance the debts being created by the current GOP led White House and Congress. And the trade wars Trump started with China, the EU, Canada and Mexico are not projected to help US economic growth either.
clinton boom bush crash obama recovery trump slump https://t.co/7Iv48ciyhn— Oliver Willis (@Oliver Willis)1530040857.0
So the Trump slump is no great surprise, since the GOP currently holds the White House and both houses of Congress. But the record breaking debt is extreme even for a Republican presidency.
Some are wondering if it's due to Trump's own business style of racking up debts then walking away from them through bankruptcy proceedings. Unfortunately that business model doesn't work for a country.
Luckily, Trump can just declare bankruptcy.... oh wait https://t.co/jBnHhjIllJ— Molly Jong-Fast (@Molly Jong-Fast)1530051082.0
This is what happens when the self-proclaimed “King of Debt” becomes president. Debt as a share of our economy is… https://t.co/wk1pqReT9n— Mike Levin (@Mike Levin)1530058543.0
Trump/GOP leaders said tax-cuts would lift economy out of long-term rut, boosting growth to 3-4% and preventing de… https://t.co/zwsSwgmUQT— John Harwood (@John Harwood)1530050608.0
In March 2016, Trump promised to eliminate all US debt in 8 years. Instead, he’s racking up a bigger bill. Let’… https://t.co/IUqvf7if05— Adam Best (@Adam Best)1530051702.0
I remember when this would have been a front-page story, with lawmakers demanding action https://t.co/311eoytSzU— Glenn Kessler (@Glenn Kessler)1530023269.0
The federal debt this year to hit the highest levels since WWII. The debt is on track to be equal in size to the en… https://t.co/5PrJX6XOpQ— Joe Walsh (@Joe Walsh)1530039171.0
Another “tax cuts will pay for themselves” update: Today @USCBO Long-Term Budget Outlook shows our debt is on track… https://t.co/x67zAnXDtc— Michael Bennet (@Michael Bennet)1530045790.0
Remember when Trump and the GOP leadership said the tax cuts would pay for themselves? Today the CBO announced that… https://t.co/4LsGS0LVjo— Maurice Ross (@Maurice Ross)1530065833.0
@realDonaldTrump Quick question “Mr. President.” Did you see that CBO report about the national debt? Wow. I thoug… https://t.co/M9ueFaYz4q— Toxic Rush (@Toxic Rush)1530065938.0
Flattering Trump at WH, GOP Sen Perdue credits him for reviving economy stuck at Obama's weak 1.9% growth rate now… https://t.co/7ZhslrrHCe— John Harwood (@John Harwood)1529512971.0
Federal debt to reach $100 trillion: CBO It was 400 billion under Obama. #GOPTaxScam Spending will surge, while ta… https://t.co/mC2QU68U1x— Stephen Maddox Sr (@Stephen Maddox Sr)1530111837.0
@SpeakerRyan U.S. DEBT ON TRACK TO GROW TO 'HIGHEST LEVEL IN U.S. HISTORY BY FAR' SAYS CBO And cue Paul Ryan to ca… https://t.co/U8800BWDBb— MAYRA Feeley (@MAYRA Feeley)1530112154.0
McConnell last night: "I’m totally confident this is a revenue neutral bill. Actually a revenue producer." This wa… https://t.co/rjPligk1gU— Josh Jordan (@Josh Jordan)1512234915.0
November is still over 4 months away. The GOP can only hope voters have short memories when they campaign on issues of the economy.