The US National Debt Growth Rate The Clinton-Bush-Obama Transitions

A Glimpse of the Economic Work Function

http://25.media.tumblr.com/tumblr_m9kqzq6NNw1qedj2ho1_400.jpg http://i.dailymail.co.uk/i/pix/2012/09/06/article-2198703-14BE41B1000005DC131_634x425.jpg In an amazing display of patriotism, the Republicans claim to have built the entire $16T national debt during their recently concluded nominating convention! (DNC joke!)

The national debt was $71.060 million on Jan 1, 1790 and $75.463 million on Jan 1, 1791. It crossed the $100 million mark in 1815-1816. It was NOT allowed to double to $200 million or quadruple to $400 million. Instead, it was gradually paid off and the national debt was down to $33,733.05 on Jan 1, 1835 and briefly $0 around Jan 8, 1835. Yes, zero! The debt crossed the $100 billion mark in 1942-43 (WWII). It doubled by 1944 and quadrupled, crossing $400 billion mark, in 1971-1972. The USA entered the era of the trillion dollar national debt in 1981, when Reagan was President (ten-fold increase in just 40 years!) The national debt quadrupled, from $1T in 1981 to $4T in 1992, when the senior George Bush was President. It has now quadrupled a second time, crossing the $16T mark on August 31, 2012 under President Obama. The first quadrupling (in the trillion dollar era) was accomplished in just under three Presidential terms. The second quadrupling has taken 4.9 terms (two Clinton, two Bush, and the partial Obama term).
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 1. Summary
The rate of growth of the national debt D as a function of time t, given by the slope h = dD/dt of the D-t graph is just as important as the absolute debt level D. Unfortunately, very little attention seems to have been devoted (at least in popular discussions of this topic) to the precise determination of the debt growth rate, dD/dt, and its fundamental implications. For example, the national debt has increased by $5.363 trillion in a period of just 1319 days, less than one Presidential term (1461 days), under President Obama. It has just crossed the $16 T mark (T = trillion) on August 31, 2012. The debt increased by only $4.899 T during the two full terms of the Bush presidency. The reason for the rapid rise in the debt in the Obama years is shown here to be due to the higher rate of growth of the debt, dD/dt, towards the end of the Bush presidency ($4585 million per day) which matches very closely with the calculated initial debt growth rate for the Obama term ($4698 million per day). This explains why the debt has increased so rapidly under Obama. (It has actually slowed down to a lower rate of about $3550 million per day since Dec 31, 2010!) The debt growth rate accelerated significantly during the Bush presidency, from an initial rate of $1096 million per day, to a final rate of $4585 million per day. The deviation from the initial lower rate coincides with the start of the Iraq war and the final rapid increase in the rate coincides with the initial steps taken to arrest the total financial meltdown of 2008. Going a step further, it is shown here that the initial debt growth rate, during the Clinton presidency, was about $906 million per day, which is remarkably close to the initial growth rate for the Bush presidency. In fact, a lower initial rate of $940 million per day can be deduced for the Bush presidency (by including more data points), making the initial rates virtually identical for the Clinton and the Bush presidencies. In other words, the D-t graph appears to be a set of parallels with intervening periods of a deceleration (slowing down, Clinton and Obama terms), or an acceleration (Bush), of the debt growth.
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With the recent slowing the debt growth rate, the economy may actually be headed towards a new parallel to the initial Clinton and Bush growth lines, which should be established in the coming quarters. These empirical observations (mostly) and conjectures (a few) also lead us to the far-reaching idea of an economic work function, akin to the work function conceived by Einstein to explain the photoelectric effect.

Related articles by the author available at this website

1. http://www.scribd.com/doc/104833993/Are-You-Better-Off-Than-You-WereFour-Years-Ago Published Sep 4, 2012. Briefly highlights the slowing down the debt growth rate as we cross the $16 T mark. The national debt could have been as high as $19.5T on August 30, 2012 if the high rate at the end of the Bush presidency had continued. 2. http://www.scribd.com/doc/104803209/The-Rate-of-Growth-of-the-NationalDebt-The-Obama-versus-the-Bush-years Published Sep 3, 2012. The importance of the debt growth rate h = dD/dt, as opposed to the debt level D, is emphasized. The significance of the debt growth rate does not seem to have been recognized, at least in the popular discussion. 3. http://www.scribd.com/doc/104677653/The-US-National-Debt-Brief-HistoryGood-News-The-Rate-of-Growth-of-the-Debt-is-Slowing-Down , Published Sep 1, 2012. Brief summary of the historical debt data starting with President George Washington with attention being drawn to the recent slowing down of the debt growth rate. The importance of the debt growth rate, as opposed to debt levels, does not seem to have been recognized, at least in the popular discussion. 4. http://www.scribd.com/doc/104659108/The-US-National-Debt-and-the-LongTerm, first published on June 17, 2011, and republished Sep 1, 2012. 5. http://www.scribd.com/doc/104659448/The-US-National-Debt-RetirementProgram, first published on June 23, 2011, before the debt default crisis which led to lowering of the US rating, republished Sep 1, 2012. 6. http://www.scribd.com/doc/104662291/A-Radical-Proposal-to-PermanentlyReduce-the-Unemployment-Rate, first published on October 13, 2011, republished Sep 1, 2012. 7. http://www.scribd.com/doc/104661297/Is-Taxing-the-Rich-an-Option-forBudget-Deficit-Reduction, first published on July 3, 2011, republished Sep 1, 2012.
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Table of Contents
No. 1 2 3 4 5 6 7 8 9 Topic Summary Introduction Debt growth rate and speed of a moving vehicle Bush presidency: Initial and final debt growth rates Clinton presidency: Initial and final debt growth rates Brief Discussion: Economic Work Function Appendix I: Growth of the national debt during Clinton era Appendix II: Annual Debt data from Carter to Obama Appendix III : Bibliography of Related Articles Page No. 1 5 6 7 10 14 17 18 22

http://www.usdebtclock.org/

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 2. Introduction
The national debt has grown by more than $5 trillion since President Obama took office on Jan 20, 2009, see Table 1, and has crossed the $16 trillion mark on Friday August 31, 2012, over the Labor Day weekend. Indeed, the debt added during the Obama years (D, the delta D, in the last column of Table 1) already exceeds the total debt added during the two full terms of President George W Bush. Why has the debt grown so rapidly in the Obama years?

Table 1: The US National Debt from Clinton to Obama

President Time t Debt, D Debt added, (Days in office) $, trillions D 1/20/1993 2922 4.188 1.540 Bill Clinton 1/20/2001 2922 5.728 4.899 George W Bush 1/20/2009 1318 15.99 5.360 Barrack Obama Source: Treasury Direct, Bureau of Public Debt. For President Obama, the debt added is as of August 30, 2012. Click on hyperlink above to get the debt values for the desired date ranges. Values analyzed here and in the earlier articles are the quarterly figures obtained from this website. As discussed in a recent article, Ref. [2] above (click here), the rate of growth of the national debt, measured by the slope h = dD/dt, of the graph of debt D versus time t, is just as important as the debt level, D. Here the time t is measured in days. The debt growth rate is measured in dollars per day (trillions, billions, or more conveniently, millions). Just as the speed of a moving vehicle determines how fast it will arrive at a new location, the debt growth rate determines how quickly the debt will reach a new level. The debt growth rates determined from the current analysis, for these three presidencies (to date) is summarized in Table 2. The widespread prevalence of a ticking national debt clock (in several countries) implies that one is able to program a computer to display how the debt grows as a function of time (presumably at some fixed growth rate).
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Start Date

 3. Debt growth rate and the speed of a moving vehicle

The debt level D is just like the position x of a moving vehicle, such as a car, moving unimpeded on an open highway. The rate of growth of the debt h = dD/dt, is like the instantaneous speed of the vehicle. The instantaneous speed is not the same as the average speed. The instantaneous speed is the speed at which one is traveling when stopped, for example, by a cop, for a speeding violation. The average speed is the total trip distance divided by the total time for the trip.

Table 2: US National Debt Growth Rate: Clinton to Obama

President Bill Clinton Bill Clinton Bill Clinton George Bush George Bush George Bush Time period Jan 20, 1993 to June 30, 1994 Sep 30, 1999-Dec 31, 2000 Jan 20, 1993-Jan20, 2001 June 29, 2001-June 30 2002 June 30, 2008-Dec 31, 2008 Jan 20, 2001-Jan 20, 2009 Debt growth rate dD/dt $906 million per day - $310 million per day $527 million per day $1096 million per day $4585 million per day $1677 million per day $4698 million per day $3350 million per day

Jan 20, 2009-June 30, 2010 Barrack Obama Barrack Obama Dec 31, 2010 to August 30, 2012

Note: The calculations and graph that support the above are described in the text below. The high debt growth rate towards the end of the Bush presidency matches the high growth rate at the beginning of the Obama term. The debt growth rate has slowed down to a lower level since then and is now about $3350 million per day. The Clinton era also experienced a brief period (Sep 30, 1999 to Dec 31, 2000) of NEGATIVE debt growth (negative $310 million per day). The future position of a vehicle depends not only on its current location but also on the speed (or velocity, v) with which the vehicle is moving. The speed v = x/t, or more correctly the instantaneous speed, is the rate of change of distance with time. If the vehicle is moving at 30 mph it will cover twice the distance as a vehicle moving at 15 mph, in the same time interval t. If it is moving at 60 mph,
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it will cover two times the distance covered when it is traveling at 30 mph, and four times the distance when it was traveling at 15 mph. Likewise, the future debt level D depends on the instantaneous rate at which the debt is growing at any point in time, i.e., on the numerical value of h = dD/dt.

4. Bush presidency: Initial and final debt growth rate

As shown in Ref. [2], where a comparison of the debt growth rate during the Obama and Bush years is presented, the debt growth rate dD/dt was quite low at the start of the Bush presidency: dD/dt = $1096 million per day, see Figure 3 on page 8 here. However, by the end of the Bush presidency, this rate had increased to $4585 million per day, see Figure 2 on page 7 here. These two graphs are reproduced, for convenience, as Figures 1 and 2 in the current article. The initial growth rate for the Bush presidency was determined by considering the data from Jan 20, 2001 to Dec 31, 2003. Notice that the debt dropped slightly between March 31, 2001 and June 30, 2001, before resuming its upward trend. All the other data points, through Sep 30, 2002, lie almost perfectly on a straight line. The slope of this straight line h = 0.001096 trillion per day ($1096 million per day) was determined using classical linear regression analysis. Subsequently, deviations from this initial growth line, labeled A, began and greatly accelerated after the start of the Iraq war. The data for June 30, 2003 marks the beginning of an acceleration in the growth rate (see Figure 1 of current article) which culminates in the highest growth rate of h = 0.004585 trillion per day ($4585 million per day) observed towards the end of the Bush presidency, see Figure 2 of the current article. This higher growth rate also matches with the initial growth rate for the Obama years (see also Ref. [3]), which was determined exactly as just described, for the Bush presidency. This also explains why the debt has grown so rapidly during the Obama years and why D (delta debt) for the Obama term to date exceeds the D for the two full Bush terms. The growth rate of the debt had accelerated significantly, by more than four times, from $1096 million per year to $4585 million per year, akin to increasing the speed of a car from 15 mph to 60 mph. This higher growth rate
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continued into the beginning of the Obama term and has actually fallen since then, to about $ 3350 million per year, see more detailed discussion here and here.

US National Debt, D [$, trillions]

7.00

6/30/2003

A
6.50

12/31/2002

6.00

5.50

D = 0.001096 t + 5.544 r2 = 0.9912 Initial growth rate for Bush

5.00 0 200 400 600 800 1000 1200

Time t [Days in office]

Figure 1: The initial rate of growth of the debt during the Bush presidency, Jan 20, 2001 to Dec 31, 2003. The straight line D = 0.001096t + 5.544 is the best-fit line based on five quarterly data points obtained from the Bureau of Public Debt, for the period June 29, 2001 to June 28, 2002. If the high growth rate had continued during the Obama term, the debt today would be more than $17 trillion, or even higher, about $19.5 trillion if one uses a higher rate of h = 0.00656 ($6560 million per day) the rate between June 30, 2008 and Dec 31, 2008 (click here for the graphical presentation of this point, Ref. [1]). It should be noted that initial growth rate was determined by considering the evolution of the debt over six quarters. This certainly does not make this rate an instantaneous rate in the sense that the term instantaneous is used in physics, or in vehicle speed determinations (to ascertain a speeding violation). Nonetheless, the nice linearity observed here, over several quarters, permits the use of such a
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designation for the initial rate of growth of the debt. Perhaps we should call it the local rate as opposed to the overall rate for the entire duration of the presidency, or a presidential term (16 quarters).
13.00

B
12.50

US National Debt, D [$, trillions]

12.00 11.50

12/31/2008
11.00 10.50 10.00 9.50

D = 0.004585 t 2.613 Final growth rate, Bush

9.00
8.50 8.00 2000

3/31/2008

2200

2400

2600

2800

3000

3200

3400

Time t [Days in office]

Figure 2: The growth in the national debt during the transition between the Bush second term and the Obama term. There is a near perfect match in the growth rate h = dD/dt, as revealed by the slope of the dashed straight line which connects the data points during this transition. We will now discuss the debt growth characteristics during the two Clinton terms which brought us into the 21st century. As we know, the country enjoyed a period of relative prosperity during the Clinton years, with budget surpluses (see here in Clintons own words, speaking to the Arkansas delegation during the Democratic
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National Convention, on Tuesday night, Sep 4, 2012). As we will see shortly, the budget surplus reveals itself as an actual decrease in the national debt, or a negative debt growth rate.

5. Clinton presidency: The initial and final growth rates

The national debt at the start of the Clinton presidency was $4.188 trillion and increased to $5.738 trillion for an average growth rate of $1.54T/2922 days = $0.000527 trillion per day, or $527 million per day. This overall average growth rate can be compared with the overall average growth rate for the Bush presidency which also lasted for the same duration, $4.899T/2922days = $0.001677 trillion per day ($1677 million per day). The average debt growth rate for the Bush years was thus more than three times the Clinton average. The instantaneous rates, determined by considering shorter time periods were even higher.
5.40 5.20 5.00 4.80

US National Debt, D [$, trillions]

D = 0.000906 t + 4.187 r2 = 0.9958 Initial growth rate for Clinton

9/29/1995
4.60 4.40

6/30/1994
4.20

1/20/1993
4.00 0 200 400 600 800 1000 1200

Time t [Days in office]

Figure 3: The initial debt growth rate for the Clinton presidency determined using a linear regression analysis (data for Jan 20, 1993 through June 30, 1994).
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For the Clinton presidency, the initial debt growth rate was determined as described earlier for the Obama and Bush presidencies by considering the data for the period Jan 20, 1993 to June 30, 1994, see Figure 3. A remarkably linear trend is observed with the best-fit line having a slope h = dD/dt = 0.000906 trillion per day, or $906 million per day. The overall evolution of the debt during the two Clinton terms is illustrated graphically in Figure 4.
7.00

US National Debt, D [$, trillions]

6.50

6.00

5.50

D = 0.00094 t + 5.71 Initial growth rate, Bush

5.00

4.50

D = 0.00091 t + 4.187 r2 = 0.9958 Initial growth rate for Clinton

0 1000 2000 3000 4000 5000

4.00

Time t [Days in office]

Figure 4: Overall evolution of the debt during the two Clinton terms. The blue diamonds represent the Clinton data. The red squares represent the initial data for the Bush presidency and yields the initial debt growth rate for the Bush presidency. Notice that the initial growth rates were roughly the same for both the Clinton and the Bush presidencies with the data falling on roughly parallel lines. It is important to note that the data begins to deviate significantly from this initial growth line after Sep 29, 1995. There was a significant slowing down in the debt growth rate. We also observe a small peak (maximum point) on the graph and an actual decrease in the debt (negative slope) due to the budget surpluses that were enjoyed during these years. This is highlighted separately in Figure 5.
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The dashed red line with the negative slope is the overall change between Sep 30, 1999 and Dec 31, 2000. The red square represents the final data point, the national debt on the last day of the Clinton presidency. The debt increased slightly between Election Day 2000 and Inauguration Day, Jan 20, 2001.
5.80

US National Debt, D [$, trillions]

9/30/1999
5.78 5.76 5.74 5.72 5.70

Negative Debt Growth Rate, Clinton D = -0.00031t + 6.5662

Jan 20, 2001

5.68 5.66

12/31/2000
5.64 2400

2500

2600

2700

2800

2900

3000

Time t [Days in office]

Figure 5: The debt growth rate slowed down during the Clinton years, starting with the third quarter of 1995 (Sep 29, 1995). A small peak was observed on the Dt graph followed by a brief period where the debt D was actually decreasing with time t, yielding a negative slope dD/dt, which is highlighted here using an expanded scale. The red dashed line with the negative slope illustrates the overall change from Sep 30, 1999 to Dec 31, 2000. There was a small increase in the debt between Election Day 2000 and Inauguration Day 2001 (red square). Finally, a composite plot of the debt growth for the Clinton-Bush-Obama years is presented in Figure 6. The initial growth rate established during the Clinton first term is indicated by the straight line labeled A. It is of interest to note that, because of the significant slowing down of the debt growth rate during the Clinton
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presidency, much of the data for the Bush years falls below the extrapolation based on this initial debt growth rate for the Clinton era. The crossover occurred between September and December 2007. On Sep 28, 2007, the debt D had just crossed the $9T mark and was equal to $9.008 trillion. The projection based on Line A is slightly higher, being $9.047 trillion. On Dec 31, 2007, the debt D was $9.229T and the projected value was slightly lower, being $9.132 T.
18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00 0 1000 2000 3000 4000 5000 6000 7000 8000

US National Debt, D [$, trillions]

D = 0.00091 t + 4.187 r2 = 0.9958 Initial growth rate for Clinton

Clinton

Bush

Obama

Time t [Days in office]

Figure 6: Composite plot illustrating the growth of the debt during the ClintonBush-Obama years. Extrapolating from the initial growth line A, established during the Clinton presidency shows that the national debt, on August 31, 2012 (day 7164 since Clinton took office), would be $10.677 T instead of $16.106T. In other words, the prosperity of the Clinton era, and the reduction in the growth of the debt during the two Clinton terms seems to have been sufficient to cushion even the multi-trillion dollars spent on the Bush wars, see also Figures 7 and 8 in Appendix II. (It remains to be seen if democracy will take root in Iraq and in the larger Middle East!).
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The debt growth rate accelerated significantly and started rising above the Clinton Base Line A, only after the total financial meltdown experienced in 2008. As discussed earlier, the debt growth rare dD/dt increased to $4585 million per day (slope of the line joining March 31, 2008 and Dec 31, 2008 data points) as the Bush presidency came to an end. An even higher growth rate dD/dt = $6560 million per day is deduced if we consider the June 30, 2008 and Dec 31, 2008. The lasting effects of this huge acceleration in the debt growth rate in 2008 are still being felt, although the debt growth rate has indeed slowed down to about $3550 million per day, since March 2011.

6. Brief Discussion: The Economic Work Function

Quite interestingly, with the start of the Bush presidency, the debt started increasing once again (see red squares in Figure 4) at roughly the same rate as the initial rate observed for the Clinton presidency. As noted earlier (see also Figure 1 of current article), the initial debt growth rate for the Bush era was calculated at $1096 million per day, using classical linear regression analysis. Five out of seven data points from Jan 20, 2001 to June 28 2002 were used to develop this regression equation. (The data for Jan 20, 2001 and March 31, 2001 were excluded since the debt decreased slightly at first before moving along the line labeled A in Figure 1). Instead, if we use the data points for March 30, 2001 and March 31, 2003, we deduce a slightly lower slope h = 0.00094 trillion per day ($940 million per day) which matches almost exactly the initial Clinton slope of $906 million per day.

This seems like a remarkable coincidence.

This observation leads us to the speculation that the national debt data, like other financial data for corporations such as Microsoft (click here and here) and the new General Motors (click here and here), may also essentially be jumping from one parallel to another with an extended transition period, as observed during the Clinton presidency. This, therefore, lends support to the far reaching idea of an economic work function governing the functioning of the economy as a whole, as well as individual corporations. The economic work function suggested here is akin to the work function W introduced by Einstein when he formulated his
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famous photoelectric law, in 1905. Further discussion of this point may be found in the articles discussing the financial performance of Microsoft, Google, the new General Motors and Kia Motor Company. Einsteins photoelectric law is a simple linear law K = E W = hf W = h(f f0) which is exactly similar to the linear law y = hx + c = h(x x0) relating revenues x and profit y for a company and now the national debt D and time t. As discussed in several articles cited, this linear profits-revenues law is a consequence of the classical breakeven analysis for the profitability of a company. The nonzero intercept c, often observed in the analysis of financial data, and now the national debt data as well, is analogous to Einsteins work function W from physics. Very briefly, when light shines on the surface of a metal, electrons are ejected which can be collected and made to flow in an external circuit. Modern photocells, used in a variety of applications, work on this principle. The photons that strike the metal surface have the energy E = hf where h is a universal constant called the Planck constant and f is the frequency (of light, which also have a wave characteristic). Some of this energy E must be given up to do the work needed to overcome the forces that bind the electron to the metal. Einstein calls this the work function W, which is a characteristic property of the metal. Hence, the maximum (kinetic) energy of the electron K = E W. The graph of K versus f is thus a series of parallels with an intercept c = - W, the negative of the work function. As the frequency f increases above the cut-off value of f0, the kinetic energy of the electron K also increases, following the linear K-f law. However, if there is a fundamental change in the characteristic of the metal upon which the photons strike, the work function W changes and the photoelectric data (K, f values) shifts to a parallel line with the same slope h but with a different intercept c = - W, which may be higher or lower depending on the nature of the metal with which the photons are interacting. We see exactly the same kind of movement along parallels when we study the financial data for good companies like Microsoft and Google which have set the modern standard of excellence for financial performance. Interestingly, the new GM also reveals the same behavior. The financial world is governed by the
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universal law P = R C where profits P is exactly analogous to the energy K of the electron, the revenues R is exactly analogous to the energy of the photon E and the costs C are exactly similar to the work that must be done to produce the electron. Not all of the revenues R will appear as profits P. Some of the revenue must be given up, in the form of costs C, just as the energy W must be given up in the photon-electron interaction problem. More generally, the nonzero intercept c can be thought of as a generalized work function whenever we observe a simple linear law when analyzing the behavior of a complex system. And so, it appears that we may be witnessing, or getting at least a glimpse, of exactly a similar type of behavior with the national debt data. A more complete study of ALL of the national debt will, no doubt, reveal further insights into this suggestion. More importantly, future observations will be even more meaningful. We already know that the debt growth rate has slowed down significantly during the Obama term to date. Perhaps, the data is moving towards a new parallel, with a lower (or more negative) value of the intercept in the simple law, D = ht + c, relating debt D and time t. In summary, the reader is urged to consider the graph in Figure 4, which shows the initial slope is, quite amazingly, almost exactly the same for both Clinton and Bush. It is this striking feature of the D-t graph that has prompted the discussion here about the economic work function, i.e., the name that can be given to the nonzero intercept in all linear laws, y = hx + c. This nonzero intercept can be thought of as the analog of the work function in Einstein's photoelectric law. Also, important are the findings as presented in Figures 6, 7 and 8, with the last two being relegated to Appendix II. Going beyond partisan rhetoric, these graphs show that the huge acceleration of the debt growth rate, as the Bush presidency came to an end, has now been stopped. However, like a relay runner, President Obama was also stuck with the high debt growth rate handed to him, which is clearly primarily the result of the financial meltdown. The analysis in Figure 6 to 8 implies that the effect of the financial meltdown was even more important than the effect of the Bush wars: the Iraq war, the Afghan war, and the war on terrorism.
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 7. Appendix I
US National Debt during the Clinton terms
Date
1/20/1993 3/31/1993 6/30/1993 9/30/1993 12/31/1993 3/31/1994 6/30/1994 9/30/1994 12/31/1994 3/31/1995 6/30/1995 9/29/1995 12/29/1995 3/29/1996 6/28/1996 9/30/1996 12/30/1996 3/31/1997 6/30/1997 9/30/1997 12/30/1997 3/31/1998 6/30/1998 9/30/1998 12/31/1998 3/31/1999 6/30/1999 9/30/1999 12/31/1999 3/31/2000 6/30/2000 9/29/2000 12/31/2000 1/20/2001

Time t (days in office)

1 71 162 254 346 436 527 619 711 801 892 983 1074 1165 1256 1350 1441 1532 1623 1715 1806 1897 1988 2080 2172 2262 2353 2445 2537 2628 2719 2810 2903 2923

Debt, D $, trillions
4.188 4.226 4.352 4.411 4.536 4.576 4.646 4.693 4.800 4.864 4.951 4.974 4.989 5.118 5.161 5.225 5.271 5.381 5.376 5.413 5.502 5.542 5.548 5.526 5.614 5.652 5.639 5.656 5.776 5.773 5.686 5.674 5.662 5.728

Source: Bureau of Public Debt. A similar tabulation of the debt data for the Bush and the Obama years is provided in Refs. [1-3] cited earlier.

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 8. Appendix II
Annual National Debt from Carter to Obama
Debt, D $, trillions Clinton 1993 4.411 1976 0.620 1994 4.693 Ford 1977 0.699 1995 4.974 Carter 1978 0.772 1996 5.225 1979 0.827 1997 5.413 1980 0.908 1998 5.526 1999 5.656 Reagan 1981 0.998 2000 5.674 1982 1.142 1983 1.377 Bush-II 2001 5.807 1984 1.572 2002 6.228 1985 1.823 2003 6.783 1986 2.125 2004 7.379 1987 2.350 2005 7.933 1988 2.602 2006 8.507 1989 2.857 Bush-I 2007 9.008 1990 3.233 2008 10.025 1991 3.665 Obama 2009 11.910 2010 13.561 1992 4.065 2011 14.790 8/31/2012 16.016 Source: Bureau of Public Debt. Daily debt values (from which the quarterly data were deduced) are only available through 1993. Annual data are available from 1790 to present. The above debt figures are for fiscal year ending Sep 30 of each year. Hence, Ford was still President in 1976, on the date corresponding to the debt figure here. The $1 T mark was crossed in 1981, when Reagan was President. The debt figure crossed the $4T mark in 1992 (President Bush-I), the $9T mark in 2007 and $10T mark in 2008 (President Bush-II). It has now crossed the $16T mark under President Obama, on August 31, 2012. President Year Debt, D $, trillions President Year

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US National Debt, D [$, trillions] Calendar years]

8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 1976

Approx. 50% increase in Debt $4T to $6T Clinton Quadrupling of debt $1T to $4T Reagan-Bush I

D = 0.327t 646.9 r2 = 0.9932

1980

1984

1988

1992

1996

2000

2004

Time t [in Calendar years]

Figure 7: Growth of the national debt from 1976 to 2001. Values plotted here are for the fiscal year ending Sep 30 of each year. The main purpose here is to discuss briefly the debt growth rate in the era since 1981 when the national debt crossed the $1T mark (one trillion) during the first year of the Reagan presidency. As we see here, the debt was actually increasing at an accelerating rate (curve with increasing slope) between 1976 and 1986 after which the debt started increasing at a fixed rate (constant positive slope). The equation for the best-fit line (deduced using linear regression analysis), considering ALL the data from 1985 to 1995, is D = 0.327t 646.9, with a very high linear regression coefficient r2 = 0.9932. The debt growth rate then slowed down starting 1997, during the second term of the Clinton presidency. The rate of growth of the debt, given by the slope of the best-fit line, h = dD/dt = 0.327 trillion per year, or $0.000895 trillion per day, or $895 million per day, is in agreement with the value of $906 million per day deduced as the initial growth rate

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for the Clinton presidency, which started in 1993, overlapping the period 1985 to 1995 used to arrive at the slope here.

US National Debt, D [$, trillions] Calendar years]

20.00 18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 2020

D = 1.51t 3021.7 r2 = 0.9921

D = 0.327t 646.9 r2 = 0.9932

Time t [in Calendar years]

Figure 8: The growth of the national debt from Sep 30, 1976 to August 31, 2012. The debt figures are for fiscal year ending Sep 30, except the 2012 value. As noted earlier, the national debt quadrupled, from $1T to $4T, in the Reagan and Bush I presidencies (3 terms). It has quadrupled again and crossed the $16T mark. This, however, occurred, over 4.9 presidential terms (Clinton 2, Bush-II 2, and Obama 1319 days out of 1461 for first term). The effect of the slowing down in the debt growth rate during the Clinton terms is also obvious in the plot prepared in Figure 7. The debt values are lower than predicted by the extrapolation of the line A, the slope of which matches the initial growth rate for the Clinton presidency (deduced using quarterly figures). The debt starts deviating and increasing rapidly above this Line A only after 2008, which coincides again with the near total financial meltdown experienced that year. The red line B, with the steeper slope
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now describes the data. The equation of the line joining the 2007 and 2011 data is D = 1.4455t 2892. The slope h = dD/dt equals $1.44T per year or $0.004058 trillion per day, or $4058 million per day, is again seen to be in agreement with the high rate of h = dD/dt = $4585 million per day deduced as the final rate for the Bush-II presidency. The best-fit line through these five points has the equation D = 1.51 t 3021.7 with a linear regression coefficient r2 = 0.9921. The slope h = D/dt = $1.51T per year is again in agreement with the slope $1.4455T per year deduced using only two data points.
1600 1400 1200 1000 800 600 400 200 0 1936

US National Debt, D [$, billions] Calendar years]

1944

1952

1960

1968

1976

1984

1992

Time t [in Calendar years]

Figure 9: The quadrupling US march to its first trillion in national debt. The debt crossed the $100 billion mark, as the US entered WWII (1941-1942). It doubled to $200 billion by 1944 and quadrupled to $400 billion by 1971-1972. This quadrupling took about 30 years (8 Presidential terms). It crossed the $1T mark in 1981 when Reagan was President and quadrupled to $4T by 1992 when the senior George Bush was President (3 Presidential terms). It has quadrupled again to $16T in Obamas first term (4.9 Presidential terms).

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US National Debt, D [$, billions] Calendar years]

290 285 280 275 270

265
260 255 250 1944

1948

1952

1956

1960

1964

Time t [in Calendar years]

Figure 10: Between 1946 and 1948, after the end of WWII, the US actually started paying off its debt. The debt also went down between 1950 and 1951 and 1955 and 1956. This negative slope on the D-t graph was seen again during the Clinton era; see historical tables on budget deficits and surpluses going back to 1789 (George Washington was sworn in as the first President, there was no White House then); see http://www.gpo.gov/fdsys/pkg/BUDGET-1996-TAB/pdf/BUDGET-1996TAB.pdf . (Between 1920 to 1930 the US enjoyed a period of uninterrupted budget surpluses, see Figure 11.)

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US National Debt, D [$, billions] Calendar years]

50.00 45.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 1896 1904 1912 1920 1928 1936 1944 1952

D = -0.977t + 1901.3

D = 2.907t - 5597

Time t [in Calendar years]

Figure 11: The US national debt from 1900-1940, just before the entry into WWII. In the 1920s, as we see here, the US enjoyed a period of uninterrupted budget surpluses with government receipts exceeding outlays each year, resulting in a reduction in the debt and the negative slope of the D-t graph. Notice also the remarkably linearity of the graph. The debt then started rising again, following again a remarkably linear trend. The general equation describing these trends is D = ht + c, where the slope h and the intercept c can be fixed by considering the end points for the time period of interest. Alternatively, one could perform a linear regression analysis, if more accurate quantitative estimates are of interest. The equation D = -0.977t + 1901.3, for the downward trend, is deduced by simply joining the two ends points 1920 and 1930. The upward trend is described by D = 2.907t 5597.5 = 2.907 (t 1925.2). The slope, or the rate of increase or decrease dD/dt is in billions per year; see historical tables on budget deficits and surpluses http://www.gpo.gov/fdsys/pkg/BUDGET-1996-TAB/pdf/BUDGET-1996-TAB.pdf .

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We can learn from the historical trends described here in Figures 6 to 11 (see also Ref.[4] listed in the beginning of this article) and not get paralyzed by the mindboggling trillions that are now being repeatedly thrown at us. Billions were mindboggling numbers too, in an earlier era. The debt will eventually be paid off, as the US has done repeatedly in its history. The national debt has always increased when the US was faced with a crisis. In most cases, based on history, it appears that the rise in the debt can always be associated with wars the US got engaged in: first the Revolutionary war debt, then war of 1812, then the Civil war, then the WWII, the Cold war, the Vietnam war, and more recently the war on terrorism and the Iraq and Afghan wars. The only exception to this war-debt rise scenario is the rapid rise in the debt that we observe following the financial meltdown in 2008, towards the end of the Bush presidency. Even the Bush wars, thanks to the reduction in the debt growth rate of the Clinton era, did not lead to the acceleration we see following the self-inflicted wounds of the financial sector in 2008. The debt levels were lower than the extrapolated values (based on the initial Clinton debt growth line, see Figure 6) up until the financial crisis of 2008. JOBS, Jobs, Plenty of jobs, is what we need today to regain our lost prosperity. I sincerely hope everyone will reflect on this before heading for the polls on, or before (in some cases, absentee ballots, I mean), November 6, 2012.

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 9. Appendix III: Bibliography

Related Internet articles posted at this website Since the Facebook IPO on May 18, 2012
The first article listed below discusses a little known mathematical property of a straight line. Figures 1 to 3 in this article provide the philosophical basis for considering the significance of a nonzero intercept c as it applies to many problems in the real world. We make observations (x and y values of interest to us) to deduce y/x, usually called rates, ratios, or percentages. 1. http://www.scribd.com/doc/102000311/A-Little-Known-MathematicalProperty-of-a-Straight-Line-Strange-but-true-there-is-one Published August 4, 2012. Financial data (Profits-Revenues) analysis and Generalization of Plancks law beyond physics. 2. http://www.scribd.com/doc/95906902/Simple-Mathematical-Laws-GovernCorporate-Financial-Behavior-A-Brief-Compilation-of-Profits-RevenuesData Current article with all others above cited for completeness, Published June 4, 2012 with several revisions incorporating more examples. 3. http://www.scribd.com/doc/94647467/Three-Types-of-Companies-FromQuantum-Physics-to-Economics Basic discussion of three types of companies, Published May 24, 2012. Examples of Google, Facebook, ExxonMobil, Best Buy, Ford, Universal Insurance Holdings 4. http://www.scribd.com/doc/96228131/The-Perfect-Apple-How-it-can-bedestroyed Detailed discussion of Apple Inc. data. Published June 7, 2012. 5. http://www.scribd.com/doc/95140101/Ford-Motor-Company-Data-RevealsMount-Profit Ford Motor Company graph illustrating pronounced maximum point, Published May 29, 2012.

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6. http://www.scribd.com/doc/95329905/Planck-s-Blackbody-Radiation-LawRederived-for-more-General-Case Generalization of Plancks law, Published May 30, 2012. 7. http://www.scribd.com/doc/94325593/The-Future-of-Facebook-I Facebook and Google data are compared here. Published May 21, 2012. 8. http://www.scribd.com/doc/94103265/The-FaceBook-Future Published May 19, 2012 (the day after IPO launch on Friday May 18, 2012). 9. http://www.scribd.com/doc/95728457/What-is-Entropy Discussion of the meaning of entropy (using example given by Boltzmann in 1877, later also used by Planck to develop quantum physics in 1900). The example here shows the concepts of entropy S and energy U (and the derivative T = dU/dS) can be extended beyond physics with energy = money, or any property of interest. Published June 3, 2012. 10.The Future of Southwest Airlines, Completed June 14, 2012 (to be published). http://www.scribd.com/doc/102835946/The-Future-for-SouthwestAirlines-The-Unknown-Story-of-Rising-Costs-and-the-Maximum-Point-onProfits-Revenues-Curve Published August 14, 2012. 11.The Air Tran Story: An Important Link to the Future of Southwest Airlines, Completed June 27, 2012 (to be published). http://www.scribd.com/doc/102832984/The-Air-Tran-Story-The-Merger-andMaximum-Point-on-Profits-Revenues-Graph Published August 14, 2012.

12.Annies Inc. A Single-Product Company Analyzed using a New Methodology, http://www.scribd.com/doc/98652561/Annie-s-Inc-A-SingleProduct-Company-Analyzed-Using-a-New-Methodology Published June 29, 2012 13.Google Inc. A Lovable One-Trick Pony Another Single-product Company Analyzed using the New Methodology. http://www.scribd.com/doc/98825141/Google-A-Lovable-One-Trick-PonyAnother-Single-Product-Company-Analyzed-Using-the-New-Methodology, Published July 1, 2012.
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14.GT Advanced Technologies, Inc. Analysis of Recent Financial Data, Completed on July 4, 2012. (To be published). 15.Disappearing Brands: Research in Motion Limited. An Interesting type of Maximum Point on the Profits-Revenues Graph http://www.scribd.com/doc/99181402/Research-in-Motion-RIM-Limited-WillDisappear-in-2013 Published July 5, 2012. 16.Kia Motor Company: A Disappearing Brand http://www.scribd.com/doc/99333764/Kia-Motor-Company-A-DisppearingBrand, Published July 6, 2012. 17.The Perfect Apple-II: Taking A Second Bite: A Simple Methodology for Revenues Predictions (Completed July 8, 2012, To be Published) http://www.scribd.com/doc/101503988/The-Perfect-Apple-II, Published July 30, 2012. 18.http://www.scribd.com/doc/101062823/A-Fresh-Look-at-Microsoft-After-itsHistoric-Quarterly-Loss Microsoft after the quarterly loss, Published July 25, 2012. 19.http://www.scribd.com/doc/101518117/A-Second-Look-at-Microsoft-After-theHistoric-Quarterly-Loss , Published July 30, 2012. 20.http://www.scribd.com/doc/103265909/A-Brief-Analysis-of-Groupon-s-ProfitsRevenues-Data Published August 19, 2012. 21.http://www.scribd.com/doc/103027366/Groupon-Analysis-of-ProfitsRevenues-Data-and-its-Business-Model Published August 16, 2012. More detailed analysis including discussion of the idea of a work function. 22.http://www.scribd.com/doc/103369016/Analysis-of-Zynga-s-Profits-RevenuesData-Maximum-point-on-the-profits-revenues-curve Published August 20, 2012. General Motors Financial Data 23.http://www.scribd.com/doc/103600274/The-New-GM-A-Brief-Analysis-of-theProfits-Revenues-Data-through-1Q2011, Published May 9, 2011 and again on August 22, 2012, Discussion of the new GM data from 1Q2010 to 1Q2011. 24.http://www.scribd.com/doc/103607023/Why-Can-t-General-Motors-be-morelike-Microsoft-The-new-GM-may-just-be Published August 22, 2012.

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25.http://www.scribd.com/doc/103938349/GM-Before-the-Bankruptcy-MaximumPoint-on-Profits-Revenue-Graph GM Before the Bankruptcy: Maximum point on the profits-revenues graph, Published August 25, 2012. ****************************************************************** The Unemployment Problem: Evidence for a Universal value of h in the unemployment law. 26.http://www.scribd.com/doc/100984613/Further-Empirical-Evidence-for-theUniversal-Constant-h-and-the-Economic-Work-Function-Analysis-ofHistorical-Unemployment-data-for-Japan-1953-2011 Single universal value of h for US, Canada and Japan in the unemployment law y = hx + c, Published July 24, 2012. 27.http://www.scribd.com/doc/100939758/An-Economy-Under-StressPreliminary-Analysis-of-Historical-Unemployment-Data-for-Japan, Published July 24, 2012. 28.http://www.scribd.com/doc/100910302/Further-Evidence-for-a-UniversalConstant-h-and-the-Economic-Work-Function-Analysis-of-US-1941-2011-andCanadian-1976-2011-Unemployment-Data Published July 24, 2012. 29.http://www.scribd.com/doc/100720086/A-Second-Look-at-Australian-2012Unemployment-Data, Published July 22, 2012. 30.http://www.scribd.com/doc/100500017/A-First-Look-at-AustralianUnemployment-Statistics-A-New-Methodology-for-Analyzing-UnemploymentData , Published July 19, 2012. 31.http://www.scribd.com/doc/99857981/The-Highest-US-Unemployment-RatesObama-years-compared-with-historic-highs-in-Unemployment-levels , Published July 12, 2012. 32.http://www.scribd.com/doc/99647215/The-US-Unemployment-Rate-Whathappened-in-the-Obama-years , Published July 10, 2012. **************************************************************** Traffic-fatality and Teen pregnancy problem 33.http://www.scribd.com/doc/101982715/Does-Speed-Kill-Forgotten-USHighway-Deaths-in-1950s-and-1960s Published August 4, 2012. 34.http://www.scribd.com/doc/101983375/Effect-of-Speed-Limits-on-FatalitiesTexas-Proofing-of-Vehciles Published August 4, 2012.
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35.http://www.scribd.com/doc/101828233/The-US-Teenage-Pregnancy-Rates-1 Published August 2, 2012. 36.http://www.scribd.com/doc/102384514/A-Second-Look-at-the-US-TeenagePregnancy-Rates-Evidence-for-a-Predominant-Natural-Law Published August 8, 2012. Government and National Debt 37.http://www.scribd.com/doc/104663110/The-United-States-Postal-Service-ATest-Case-to-Understand-the-US-Government-Inefficiencies-and-Budget-CutsAhead United States Postal Service: A Test case for government inefficiencies, Published Sep 2, 2012. 38.http://www.scribd.com/doc/104833993/Are-You-Better-Off-Than-You-WereFour-Years-Ago Published Sep 4, 2012. Briefly highlights the slowing down the debt growth rate as we cross the $16 T mark. The national debt could have been as high as $19.5T on August 30, 2012 if the high rate at the end of the Bush presidency had continued. 39.http://www.scribd.com/doc/104803209/The-Rate-of-Growth-of-the-NationalDebt-The-Obama-versus-the-Bush-years Published Sep 3, 2012. The importance of the debt growth rate h = dD/dt, as opposed to the debt level D, is emphasized. The significance of the debt growth rate does not seem to have been recognized, at least in the popular discussion.

40.http://www.scribd.com/doc/104677653/The-US-National-Debt-Brief-HistoryGood-News-The-Rate-of-Growth-of-the-Debt-is-Slowing-Down , Published Sep 1, 2012. Brief summary of the historical debt data starting with President George Washington with attention being drawn to the recent slowing down of the debt growth rate. The importance of the debt growth rate, as opposed to debt levels, does not seem to have been recognized, at least in the popular discussion. 41.http://www.scribd.com/doc/104659108/The-US-National-Debt-and-the-LongTerm, first published on June 17, 2011, and republished Sep 1, 2012. 42.http://www.scribd.com/doc/104659448/The-US-National-Debt-RetirementProgram, first published on June 23, 2011, before the debt default crisis which led to lowering of the US rating, republished Sep 1, 2012.
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43.http://www.scribd.com/doc/104662291/A-Radical-Proposal-to-PermanentlyReduce-the-Unemployment-Rate, first published on October 13, 2011, republished Sep 1, 2012. 44.http://www.scribd.com/doc/104661297/Is-Taxing-the-Rich-an-Option-forBudget-Deficit-Reduction, first published on July 3, 2011, republished Sep 1, 2012.

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About the author V. Laxmanan, Sc. D.

Email: vlaxmanan@hotmail.com The author obtained his Bachelors degree (B. E.) in Mechanical Engineering from the University of Poona and his Masters degree (M. E.), also in Mechanical Engineering, from the Indian Institute of Science, Bangalore, followed by a Masters (S. M.) and Doctoral (Sc. D.) degrees in Materials Engineering from the Massachusetts Institute of Technology, Cambridge, MA, USA. He then spent his entire professional career at leading US research institutions (MIT, Allied Chemical Corporate R & D, now part of Honeywell, NASA, Case Western Reserve University (CWRU), and General Motors Research and Development Center in Warren, MI). He holds four patents in materials processing, has co-authored two books and published several scientific papers in leading peer-reviewed international journals. His expertise includes developing simple mathematical models to explain the behavior of complex systems. While at NASA and CWRU, he was responsible for developing material processing experiments to be performed aboard the space shuttle and developed a simple mathematical model to explain the growth Christmas-tree, or snowflake, like structures (called dendrites) widely observed in many types of liquid-to-solid phase transformations (e.g., freezing of all commercial metals and alloys, freezing of water, and, yes, production of snowflakes!). This led to a simple model to explain the growth of dendritic structures in both the ground-based experiments and in the space shuttle experiments. More recently, he has been interested in the analysis of the large volumes of data from financial and economic systems and has developed what may be called the Quantum Business Model (QBM). This extends (to financial and economic systems) the mathematical arguments used by Max Planck to develop quantum physics using the analogy Energy = Money, i.e., energy in physics is like money in economics. Einstein applied Plancks ideas to describe the photoelectric effect (by treating light as being composed of particles called photons, each with the fixed quantum of energy conceived by Planck). The mathematical law deduced by
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Planck, referred to here as the generalized power-exponential law, might actually have many applications far beyond blackbody radiation studies where it was first conceived. Einsteins photoelectric law is a simple linear law, as we see here, and was deduced from Plancks non-linear law for describing blackbody radiation. It appears that financial and economic systems can be modeled using a similar approach. Finance, business, economics and management sciences now essentially seem to operate like astronomy and physics before the advent of Kepler and Newton.

Cover page of AirTran 2000 Annual

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