Managerial Economics: Examining the Fluctuations in U.S. National Debt

This essay provides an analysis of the U.S. national debt from a managerial economics perspective, examining its fluctuations under different presidential administrations, including G.W. Bush, Obama, and Trump. It highlights the significant increase in national debt during the Bush and Obama administrations due to factors such as the global financial crisis and increased government spending. The essay also touches upon Trump's initial strategies to reduce the national debt by increasing tax revenues and cutting federal expenditure. The analysis refers to economic viewpoints supporting debt-financed government spending during recession periods to mitigate adverse economic effects. The document is available on Desklib, a platform offering study tools and solved assignments for students.

Running head: MANAGERIAL ECONOMICS
Managerial Economics
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The U.S National Debt:
The federal government of the United States carries national debt of this country. The
public debt of U.S is a share of total national income of this country and this has increased
previously during recessions and wars and has decreased continuously. For instance, after
World War II, public debt has become 113% of GDP in 1945. After this year, the rate has
decreased continuously. However, the government of this country has expected presently that
this public debt can increase further due to increasing healthcare costs and aging
demographics.
Figure 1: national debt of the U.S
Source: (Tradingeconomics.com, 2018)
Figure 1 has represented that national debt of this country has increased continuously
for the last five years. In 2018, total amount of national debt has remained US$ 21068200
million. In 2017, the debt amount held by government has remained approximately 77% of
total GDP and consequently has ranked 43rd among 207 countries (Tradingeconomics.com,
2018).
The US national debt during GW Bush:
During the period of GW Bush, household debt has grown significantly and has
reached at a record level. The debt has increased from $ 7.4 trillion in first quarter of 2001 to

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$ 14.3 trillion in fourth quarter of 2008. Thus, in terms of GDP, national debt has increased
from 70% of total GDP in 2001 to 99% of total GDP in 2008 (Seidman, 2017). During this
period, defence expense has increased from $306 billion to $612 billion, which means, 2.9%
of GDP in 2001 to 4.2% of GDP in 2008. Moreover, changing fiscal policy has worsened this
situation further. The amount of deficits during this period has ended up with $6.1 trillion.
The US national debt during Obama:
President Obama has taken responsibility in 2009 after the global financial crisis of
2007-2008. The amount of national debt of the U.S.A has remained roughly at $10 trillion.
However, during the third quarter of 2016, this amount has increased at become
approximately $ 19 trillion. Thus, national debt under Obama has increased by $ 9 trillion or
86% of GDP (Bobo, 2017). According to some economists, the chief reason behind this
increasing national debt under the period of Obama presidency is annual deficit due to global
financial crisis.
The US national debt during Donald Trump:
At the starting phase of presidency, Donald Trump has stated to reduce national debt
within eight years. For this, two strategies have been accepted. First strategy has stated to
increase tax revenues and economic growth. Second strategy is about elimination of
redundancy and waste in federal expenditure. After taking office, trump has reduced debt by
$102 billion in the first half of the year (Evans, 2018).
Surge in national debt during GW Bush and Obama Administration:
National debt has increased significantly during the period of Bush and Obama. Due
to financial crisis, both presidents have rolled out investment bills by large amount to recover
the country (Evans, 2018). However, some economists have supported this, as according to
them spending of debt-financed government during a recession period is good to decrease the
adverse affect of the crisis on the economy.

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References:
Bobo, L. D. (2017). Racism in Trump's America: reflections on culture, sociology, and the
2016 US presidential election. The British journal of sociology, 68(S1).
Evans, T. (2018). The economic expansion in the US since 2009 and Donald Trump's
ambitions to ‘drain the swamp’. European Journal of Economics and Economic
Policies: Intervention, 15(1), 12-31.
Seidman, S. A. (2017). Election Posters in the United States After World War II. In Election
Posters Around the Globe (pp. 361-386). Springer, Cham.
United States Government Debt | 1950-2018 | Data | Chart | Calendar.
(2018). Tradingeconomics.com. Retrieved 24 June 2018, from
https://tradingeconomics.com/united-states/government-debt