Why America’s Debt Doesn’t Stop Growing
Public sector debt has been a contentious topic for many years. While some believe that excessive government borrowing can be harmful over the long term, others have argued that it acts as a powerful tool for stimulating growth.
In the U.S., the latter view appears to have taken hold. Since 2008, America’s national debt has surged nearly 200%, reaching $27 trillion as of October 2020. To gain a better understanding of this ever-growing debt, this infographic takes a closer look at various U.S. budgetary datasets including the 2019 fiscal balance.
America’s Debt vs. GDP
Government debts are often represented by incredibly large numbers, making them hard to comprehend. By comparing America’s debt to its annual GDP, we can get a better grasp on the relative size of the country’s financial obligations.
|Year||Total Public Debt (USD)||GDP (USD)||Debt as % of GDP|
Source: Federal Reserve, U.S. Treasury
In this context, U.S. debt was relatively moderate between 1994 to 2007, averaging 60% of GDP over the timeframe. This took a drastic turn during the Global Financial Crisis, with debt climbing to 95% of GDP by 2012.
Since then, America’s debt has only increased in relative size. In April 2020, with the COVID-19 pandemic in full force, it reached a record 122% of GDP. This may sound troubling at first, but there are a few caveats.
For starters, there are many other advanced economies that have also surpassed the 100% debt-to-GDP milestone. The most noteworthy is Japan, where the debt-to-GDP ratio has climbed beyond 200%. Furthermore, this is not the first time America has found itself in this situation—by the end of World War II, debt-to-GDP peaked at 106% before declining to historic lows in the 1970s.
What’s Preventing the Debt From Shrinking?
Although the U.S. continuously pays off portions of its debt, the total amount it owes has increased each year since 2001. That’s because the federal government runs consistent budget deficits, meaning it spends more than it earns. During economic crises, these deficits can become incredibly large.
|Fiscal Year (Sept 30)||Budget Surplus or Deficit (USD billions)|
Source: Federal Reserve
In the aftermath of the Global Financial Crisis, the U.S. recorded an annual deficit of $1.4 trillion in FY2009. This was largely due to the $787 billion American Recovery and Reinvestment Act of 2009, which provided tax rebates and other economic relief.
In the economic battle against COVID-19’s impacts, the boundaries have been pushed even further. The annual deficit for FY2020 weighs in at a staggering $3.1 trillion, the largest ever. Contributing to this historic deficit was the $2 trillion CARES Act, which provided wide-ranging support to the entire U.S. economy.
Breaking Down the 2019 Fiscal Balance
Even in the years between these two economic crises, government spending still outpaced revenues. To find out more, we’ve broken down the 2019 fiscal balance into its various components.
Total spending in FY2019 was roughly $4.4 trillion, and can be broken out into three components.
The first component is Mandatory Spending, which accounted for 62% of the total. Mandatory spending is required by law, and includes funding for important programs such as social security.
|Category||Amount (USD billions)||Percent of Total Federal Spending|
|Federal civilian and military retirement||$164B||3.7%|
|Total mandatory spending||$2,735B||62.2%|
Figures may not add to 100 due to rounding. Source: Peter G. Peterson Foundation
The largest category here was Health, with $1.1 trillion in funding for programs such as Medicare and Medicaid. Social security, which provides payments to retirees, was the second largest at $1.0 trillion.
The second component is Discretionary Spending, which accounted for 30% of the total. Discretionary spending is determined on an annual basis by Congress and the President.
|Discretionary Spending||Amount (USD)||Share of Total Federal Spending|
|Veteran's benefits & services||$85B||1.9%|
|Administration of justice||$59B||1.3%|
|Natural resources and environment||$44B||1.0%|
|General science, space, and technology||$32B||0.7%|
|Community and regional development||$27B||0.6%|
|Training, employment, and social services||$23B||0.5%|
Total discretionary spending
Figures may not add to 100 due to rounding. Source: Peter G. Peterson Foundation
At $677 billion, the Defense category represents over half of total discretionary spending. These funds are spread across the five branches of the U.S. military: the Army, Marine Corps, Navy, Air Force, and Space Force.
The third component of spending is the net interest costs on existing government debt. For FY2019, this was approximately $327 billion.
Revenues in FY2019 fell short of total spending, coming in at approximately $3.5 trillion. These inflows can be traced back to six categories.
|Category||Amount (USD billions)||Percent of Total Revenues|
|Individual income taxes||$1,732B||50.0%|
|Corporate income taxes||$242B||7.0%|
Figures may not add to 100 due to rounding. Source: Peter G. Peterson Foundation
Revenues overwhelmingly relied on individual income and payroll taxes, which together, accounted for 86% of the total. Corporate income taxes, on the other hand, accounted for just 7%.
Is America’s Debt a Cause for Concern?
The general consensus following the events of 2008 is that large fiscal stimulus (supported by government borrowing) was effective in speeding up the consequent recovery.
Now facing a pandemic, it’s likely that many Americans would support the idea of running large deficits to boost the economy. Surveys released in July 2020, for example, found that 82% of Americans wanted federal relief measures to be extended.
Looking beyond COVID-19, however, does reveal some warning signs. One frequent criticism of the ever-growing national debt is its associated interest costs, which could cannibalize investment in other areas. In fact, the effects of this dilemma are already becoming apparent. Over the past decade, the U.S. has spent more on interest than it has on programs such as veterans benefits and education.
With low interest rates expected for the foreseeable future, the federal government is likely to continue running its large annual deficits—at least until the effects of COVID-19 have fully subsided. Perhaps after this crisis is over, it will be time to assess the long-term sustainability of America’s rising national debt.
Visualized: The World Leaders In Positions of Power (1970-Today)
Who has led the world’s 15 most powerful countries over the last 50 years? This visual looks at world leaders from 1970 to today.
Visualized: The World Leaders In Positions of Power
Who were the world leaders when the Berlin Wall fell? How many women have been heads of state in prominent governments? And who are the newest additions to the list of world leaders?
This graphic reveals the leaders of the most influential global powers since 1970. Countries were selected based on the 2020 Most Powerful Countries ranking from the U.S. News & World Report.
Note: Switzerland has been omitted due to the swiftly changing nature of their national leadership.
The 1970s: Economic Revolutions
Our graphic starts in 1970, a year in which Leonid Brezhnev ruled the Soviet Union, while on the other side of the Iron Curtain, Willy Brandt was presiding over West Germany.
In the U.S., Richard Nixon implemented a series of economic shocks to stimulate the economy, but resigned in scandal due to the Watergate tapes in 1974. In the same time period, China was undergoing rapid industrialization and economic hardship under the final years of rule of communist revolutionary Mao Zedong, until his death in 1976.
In 1975, the King of Saudi Arabia, Faisal bin Abdulaziz Al Saud was assassinated by his nephew. The decade also marked the end of Park Chung-Hee’s dictatorship in South Korea when he was assassinated in 1979.
To cap off the decade, Margaret Thatcher became the first female prime minister of the United Kingdom in 1979, transforming the British economy using a laissez-faire economic policy that would come to be known as Thatcherism.
The 1980s: Reaganomics and the Fall of the Wall
The 1980s saw Ronald Reagan elected in the U.S., beginning an era of deregulation and economic growth. Reagan would actually meet the Soviet Union’s president, Mikhail Gorbachev in 1985 to discuss human rights and nuclear arms control amid the tensions of the Cold War.
The 1984 assassination of the Indian prime minister, Indira Gandhi was also a defining event of the decade. She was succeeded by her son, Rajiv Gandhi for only seven years before his own assassination in 1991.
The ‘80s were clearly turbulent times for world leaders, especially towards the end of the decade. In 1989, the Berlin Wall fell and Germany was reunified under chancellor Helmut Kohl. 1989 was also the year when the devastating events occurred at the Tiananmen Square protests in China, under president Deng Xiaoping. The event left a lasting mark on China’s history and politics.
The 1990s: War 2.0 and the Promise of the EU
The beginning of a new decade marked the end of the Cold War and the fall of the Soviet Union, leading to Boris Yeltsin’s position as the first president of the Russian Federation. A sense of peace, or at least the knowledge that a finger wasn’t floating above a nuclear launch button at any given moment, brought a sense of global calm.
However, this does not mean the decade was without conflict. The Gulf War began in 1990, led by the U.S. military’s Commander-in-Chief George H.W. Bush. In the mid-90s, prime minister Yitzhak Rabin of Israel was assassinated by Jewish extremists.
In spite of this, the ‘90s were a time of optimism for many. In 1993, the European project began. The European Union was founded with the support European leaders like the UK’s prime minister John Major, France’s president Francois Mitterrand, and chancellor Helmut Kohl of Germany.
The 2000s: Historic Firsts and Power Shifts
The dawn of a new century had people feeling both hopeful and scared. While Y2K didn’t end the world, many transformative events did occur, such as the 9/11 attacks in New York and the subsequent war on terror led by U.S. president George W. Bush.
On the other hand, Angela Merkel made history becoming the first female chancellor of Germany in 2005. A few years later, Barack Obama also achieved a momentous ‘first’ as the first African-American president in the United States.
The 2000s to early 2010s also revealed rapidly changing power shifts in Japan. Shinzō Abe rose to power in 2006, and after five leadership changes in seven years, he eventually circled back, ending up as prime minister again by 2013—a position he held until late 2020.
|Country||Number of Leaders Since 1970|
|🇰🇷 South Korea||10|
|🇸🇦 Saudi Arabia||5|
The 2010s: World Leaders Face Uncertainty
The 2010s were more than eventful. The Hong Kong protests under Chinese president Xi Jinping, and the annexation of Crimea led by Vladimir Putin, uncovered the wavering dominance of democracy and international law.
UK Prime Minister David Cameron’s move to introduce a Brexit referendum, resulted in just over half of the British population voting to leave the EU in 2016. This vote led to a rising feeling of protectionism and a shift away from globalization and multilateral cooperation.
Donald Trump’s U.S. presidential election was a shocking political longshot in the same year. Trump’s stint as president will likely have a longstanding impact on the course of American politics.
Two countries elected their first female leaders in this decade: president Park Geun-Hye in South Korea, and prime minister Julia Gillard in Australia. Here’s a look at which global powers have been led by women in the last 50 years.
|🇦🇺 Australia||Julia Gillard|
|🇨🇦 Canada||Kim Campbell|
|🇩🇪 Germany||Angela Merkel|
|🇮🇳 India||Indira Gandhi|
|🇰🇷 South Korea||Park Geun-Hye|
|🇹🇷 Turkey||Tansu Ciller|
|🇬🇧 UK||Margaret Thatcher|
|🇬🇧 UK||Theresa May|
2020 to Today
No one can avoid talking about 2020 without talking about COVID-19. Many world leaders have been praised for their positive handling of the pandemic, such as Angela Merkel in Germany. Others on the other hand, like Boris Johnson, have received critiques for slow responses and mismanagement.
The year 2020 packed about as much punch on its own as an entire decade does, from geopolitical tensions to a nail-biting 2020 U.S. election. The world is on high alert as the now twice-impeached Trump prepares his transfer of power following the riot at the U.S. Capitol.
The newest addition to the ranks of world leaders, Joe Biden, has recently taken his place as the 46th president of the United States on January 20, 2021.
Editor’s note: We’ll continue to update this graphic on world leaders as time goes on. Unfortunately, we were unable to include world leaders from more countries, as we were limited by the graphic format and user experience.
U.S. Presidential Voting History from 1976-2020 (Animated Map)
With this map of U.S. presidential voting history by state, discover patterns that have emerged over the last twelve elections.
U.S. Presidential Voting History by State
After a tumultuous election, all states have now certified their 2020 presidential voting results. Which states changed party allegiance, and how do the results compare to previous years?
Note: this post has been updated on January 19, 2021 to reflect the latest data.
Each State’s Winning Party
To calculate the winning ratio, we divided the votes for the state’s winning party by the total number of state votes. Here’s another look at the same data, visualized in a different way.
This graphic was inspired by this Reddit post.
As the voting history shows, some states—such as Alaska, Oklahoma, and Wyoming—have consistently supported the Republican Party. On the other hand, Hawaii, Minnesota, and the District of Columbia have been Democrat strongholds for many decades.
The District of Columbia (D.C.) is a federal district, and is not part of any U.S. State. Its population is urban and has a large percentage of Black and college-educated citizens, all of which are groups that tend to identify as Democrat.
Swing states typically see a close contest between Democrats and Republicans. For example, Florida’s average margin of victory for presidential candidates has been just 2.7% since 1996. It’s often seen as a key battleground, and for good reason: the state has 29 electoral college votes, meaning it has a high weighting in the final outcome.
Memorable Election Years
Within U.S. presidential voting history, some election results stand out more than others. In 1984, President Reagan was re-elected in a landslide victory, winning 49 out of 50 states. The remarkable win has been credited to the economic recovery during Reagan’s first term, Reagan’s charisma, and voters’ opposition to the Democrat’s planned tax increases.
In 1992, self-made Texas billionaire Ross Perot ran as a third-party candidate. He captured almost 19% of the popular vote, the highest percentage of any third-party presidential candidate in over 80 years. While he gained support from those looking for a change from traditional party politics, Bill Clinton ultimately went on to win the election.
Most recently, the 2020 election had a record voter turnout, with 66.3% of the eligible population casting a ballot. There was also a record number of mail-in ballots due to the COVID-19 pandemic. This led to widespread allegations of voter fraud, with President Trump and his allies filing 62 lawsuits seeking to overturn election results. In the end, 61 of the lawsuits were defeated and congress confirmed Joe Biden’s victory.
Voting History of Swing States
Both Trump and Biden focused on battleground states in 2020, but where were they successful? Here are nine of the swing states, and their voting history over the last two elections.
|2020 Winning Ratio||2020 Margin of Victory||2016 Winning Ratio||2016 Margin of Victory|
|Arizona||49.4% Democrat||0.31%||48.7% Republican||3.60%|
|Florida||51.2% Republican||3.36%||49.0% Republican||1.20%|
|Georgia||49.5% Democrat||0.24%||50.8% Republican||5.20%|
|Iowa||53.2% Republican||8.20%||51.2% Republican||9.40%|
|Michigan||50.6% Democrat||2.78%||47.5% Republican||0.20%|
|North Carolina||50.1% Republican||1.35%||49.8% Republican||3.60%|
|Ohio||53.3% Republican||8.03%||51.7% Republican||8.10%|
|Pennsylvania||50.0% Democrat||1.16%||48.9% Republican||0.70%|
|Wisconsin||49.5% Democrat||0.63%||47.2% Republican||0.70%|
The Republican party won four of the swing states in 2020, including Florida. However, 2020 was the first year since 1964 that the candidate who won Florida did not go on to win the election.
Five of the states—Arizona, Georgia, Michigan, Pennsylvania, and Wisconsin—flipped allegiance to the Democrats. In Georgia, the margin of victory was as small as 0.24% or about 12,000 votes. Ultimately, winning over these states helped lead to a Biden victory.
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