This is the corrected title of a deceptive (and usually statistically incompetent) article by the author Craig Aiermann of the Independent Institute (previously designated as Ironman). He wrote:

After two years in office, President Joe Biden does not have many positive achievements. boast O.

…

But while his economic legacy doesn’t look good, he gave Americans a lasting legacy. heritage. During his two years in the Oval Office, he increased the US national debt by 11%. This is really saying something, because the national debt was already $27.76 trillion on the day he was sworn in.

Mister. Eiermann’s title is, as far as I can tell, incorrect. According to Bureau of Debt of the Treasury (as of 3/8/2023), on January 20, 2023, the gross federal debt was $3,145,498,000,5742.4 and on January 20, 2021 it was $2,775,1896,236,414.7. Using Excel (to rule out typos), I found that the change over two years was $3,703,083,769,327.70, not $3,695,343,467,324.62 (as stated in Blog post on political calculations he refers). Since January 20, 2023 matches my number and the number on the Treasury website, I can only conclude that he made a mistake in the subtraction. He also made a mistake in calculating the growth percentage. I got 13.3% (not 11%). My advice is don’t trust the mathematics of the Independent Institute papers.

But actually there is a big problem with Mr. Eiermann’s calculation. First, there is no context in terms of what others have done in the first two years. In the two years from January 20, 2017 to January 20, 2019*, gross federal debt rose by 11.7%, in a period of explosive growth (January 2019 precedes the pandemic by more than a year).

Secondly, we probably would like to think about how to somehow normalize the debt burden. One way to do this is to look at the ratio of debt to potential GDP. We then have the following comparison (where I’m currently using month-end debt figures).

**Picture 1:** Gross federal debt in billions of dollars, end of month (blue, left scale) and gross federal debt in percentage points of potential GDP (red, right scale). The numbers attached to the black arrows represent changes over 2 years. Quarterly estimates of potential GDP are converted to monthly estimates using a quadratic interpolation procedure in EViews. Orange shading denotes the Trump administration. Source: Dallas FRB, CBOand the author’s calculations.

Gross federal debt includes domestic assets (that is, debt held by a Social Security Trust). A more appropriate rank to consider is publicly held debt (FRED FYGFDPUN series). I don’t have this series on a monthly basis, but I do have marketable federal debt, which has been moving very close to FYGFDPUN on a quarterly basis over the past two decades. Here is a similar chart using market debt.

**Figure 2:** Market federal debt in billions of dollars end of month (blue, left scale) and market federal debt in percentage points of potential GDP (red, right scale). The numbers attached to the black arrows represent changes over 2 years. Quarterly estimates of potential GDP are converted to monthly estimates using a quadratic interpolation procedure in EViews. Orange shading denotes the Trump administration. Source: Dallas FRB, CBOand the author’s calculations.

With regard to assessing the debt burden, one can use the market value, rather than the nominal value of the debt. The nominal value is the interest rate on the issue, and the market value is the interest rate prevailing at the time of observation. Using the market value of market debt (roughly speaking, debt owned by the public), we get the following picture.

**Figure 3:** Market federal debt at market value in billions of dollars at the end of the month (blue, left scale) and market federal debt at market value in percentage points of potential GDP (red, right scale). The numbers attached to the black arrows represent changes over 2 years. Quarterly estimates of potential GDP are converted to monthly estimates using a quadratic interpolation procedure in EViews. Orange shading denotes the Trump administration. Source: Dallas FRB, CBOand the author’s calculations.

In other words, the Trump administration increased debt to potential GDP during the boom period and was a real financial waste. *even before the Covid reaction.*

Other analyzes by Mr. Regarding Eiermann definition of externalities, What metrics are most useful for tracking economic activity at the state level, time series econometrics, adding/subtracting chain-weighted volumes I, adding/subtracting chain-weighted volumes IIetc reporting nominal compared to real values.

*In fact, to the averages for January 18 and 22, 2019, since data for January 20 is not available.

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