Doubling Time and the Debt

The U.S. national debt required over 200 years, from 1776 to 1980, to approach $1 trillion dollars. It took 25 years, from 1950 to 1975, to double the national debt, and during that time the U.S. fought two wars, in Korea and Vietnam, while paying down much of its debt from World War 2 and giving aid to European economies.

But beginning in the mid-1970s, something changed. In seven years, from 1973 to 1980, the debt doubled. It doubled again in the six years from 1980 to 1986. And it doubled again in the next six years from 1986 to 1992.

During the Clinton years, the debt’s rate of growth slowed. Then in eight years, from 2001 to 2009, the debt doubled once more. According to the US Debt Clock, at current spending rates the debt will reach $24 trillion in 2016. If that happens, the debt will have doubled during the eight years of Obama’s presidency. So, since 1973 the doubling time of the debt has been fairly steady at 6 to 8 years. A doubling time of 8 years corresponds to an annual growth rate of 12%, while 6 years corresponds to 15%.

U.S. Government public debt 1940 – 2011

For comparison, here (below) is a chart showing exponential growth.
Exponential growth

There’s a little story that illustrates the power (and danger) of exponential growth. It goes like this:

There is a lily pond. On day 1 there is one lily pad in the pond. On day 2 there are two lily pads. With each passing day, the lily pads double until after 30 days the entire pond is covered with lily pads. How long did it take to cover only half the pond? The answer, of course, is 29 days.

Exponential growth is the fastest path to infinity. Draw your own conclusions.