Donald Trump has tweeted this morning about how just absolutely terrible the media are for not making more of the manner in which the national debt has fallen since his inauguration. He's right that it has fallen--and it's also absolutely nothing at all to do with the fact that Donald Trump was elected nor that he took office. It's about the vagaries of Federal accounting plus the fact that tax revenue is rather "lumpy" to use the vernacular. What it isn't is a signal that the national debt is on a downward path generally--at a reasonable guess we'd expect that to increase by about half a trillion $ over the year as that's the size of the predicted budget deficit.
But it's still true that he's right so far:
The media has not reported that the National Debt in my first month went down by $12 billion vs a $200 billion increase in Obama first mo.
— Donald J. Trump (@realDonaldTrump) February 25, 2017
The information apparently comes from Gateway Pundit (via Herb Cain on a cable talk show) and is drawn from this listing by the Treasury.
The truth is that these numbers bumble about near randomly. Neither spending nor revenue comes in equal daily increments, meaning that the outstanding debt can rise or fall on any specific day.
Some of the criticism of Trump's point is valid:
The debt is rising more slowly now because economic growth has strengthened and because of policy decisions made during Mr. Obama’s administration. But the debt is on a clear upward trend. The nonpartisan Congressional Budget Office estimated in January that the debt would increase by $559 billion in the current fiscal year, ending in September.
That's valid--although note that the rise in the debt won't in fact equal that deficit. Because there are two entirely different sets of debt, that owed to the public and that owed inter-government (the Social Security trust fund for example, although there's lots more too) and the interaction between them is complex.
This is slightly less fair:
While it’s true that the debt probably ticked down, “this is mostly due to the federal government rebalancing its intra-governmental holdings,” the publication reported. “Debt outstanding to the public has barely budged since Inauguration Day."
That slight unfairness being that "barely budged" is true but "fallen by about $100 million" would be more accurate.
So if you were minded to say so you could, accurately, say that the public debt owed to the public has fallen since Inauguration Day. Which is fun and amusing but not important. For we're really very certain indeed that it is going to rise over the course of this year.
Although we're not absolutely 100% certain--we really must remember that all of these numbers are forecasts. Pretty good ones, the best we can do but still forecasts. And the deficit, and thus the addition to the debt, is the balance between two vast numbers. Federal spending is in the $3 to $4 trillion range, Federal revenues are in the $3 to $4 trillion range and the deficit is the difference between them. Absolutely no one at all would be surprised if either of them moved $50 billion either way from our forecasts at this point and $200 billion either way for each is possible.
For example, just to give one tiny detail, e-Bay decided a couple of years back to repatriate some foreign profits, they paid about $3 billion in corporate income tax when they did so. We really just do not know enough about the economy to be able to predict matters at that level of detail--who is going to repatriate foreign profits is something we know after they've made the decision, not before.
But still, that owed to the public has fallen. What's going on here?
The best answer being that tax revenue doesn't come in equally over the year. There are different due dates for various different taxes. This is about the UK but it illustrates the point:
UK Government Surplus Of £9.4 Billion In January, Best Since Crash
We still expect a UK deficit of £60 billion odd for the year, despite that January surplus. It's just that a number of taxes are paid in January. Please do note again, that's a British figure, I am not saying that UK tax revenue goes to the US Treasury. It's just an example of how tax systems have lumpy revenue streams. Here's a listing of US tax payments due in February for example. We just do not collect 1/365 of the revenue each day. How many weekend days in a month can make a difference, which taxes are due that month can. There are similar variances over on the spending side too.
Thus the reason the media hasn't been making an issue of this fall in the national debt--it's trivial and unimportant. It is also true but even then it's entirely nothing to do with Donald Trump. But fun all the same, no?
