Monday, August 29, 2011

Syria - An oil producing nation?

Syria has been in the news for weeks now and it is very rare that there is any mainstream media coverage of the country's oil and gas industry.  The issue did appear recently when Secretary of State Hillary Clinton stated that:

"...We urge those countries still buying Syrian oil and gas, those countries still sending Assad weapons, those countries whose political and economic support give him comfort in his brutality, to get on the right side of history...".

In light of her comments, I thought it prudent to examine just how much oil and natural gas Ms. Clinton is speaking of.  As I will outline in this posting, while its production of oil and natural gas is not large when compared to many of its Middle East neighbours, Syria is, in fact, currently the only producer of oil and natural gas among the nations on the eastern shore of the Mediterranean Sea.

Syria's first oil production began in 1968 with most of the current oil production being located along the Euphrates Graben in the northeastern part of the country.  Here is a map showing the location of the Euphrates Graben:

Here is a map showing the contract areas and oil and gas fields in Syria:

For my Canadian readers, please note the participation of PetroCanada in the northeastern most part of the country.

According to the Energy Information Administration (EIA), Syria produced around 400,000 BOPD of combined oil and natural gas liquids in 2009 and 213 BCF of natural gas in 2008.  Syria's oil production had been in a state of decline for a decade and a half since peaking at 583,000 BOPD back in 1996.  Recent successful development drilling, new discoveries and field rehabilitation are expected to increase production capability and put a halt to production declines.  Over the past 2 years alone, an additional 50,000 BOPD of productive capability has been added and in 2010, an additional 15,000 to 20,000 BOPD was expected to come on stream from new discoveries by Indian and Russian oil companies.  According to the Organization of Arab Petroleum Exporting Countries (OAPEC), Syria has 3 billion barrels of oil reserves (0.26 percent of the world's total and 0.46 percent of OAPEC's total). 

Oil production and development are managed by the Syrian Petroleum Company (SPC), an offshoot of the Ministry of Petroleum and Mineral Resources.  Foreign oil companies have been offered a share of Syria's oil industry in an attempt to stem the country's production decline with formation of the Al-Furat Petroleum Company.  This joint venture is 50 percent owned by SPC, 32 percent by Shell Oil and China's CNPC.  China is also active in other parts of Syria through its Sinochem and Sinopec government oil companies.

In the first quarter of 2011, SPC produced 1,7385,626 barrels and 1,133,354 thousand cubic metres of natural gas.  The company also drilled 49185 metres of hole.  As well, SPC has announced that it is offering another Bid Round for three offshore blocks in the Mediterranean Sea with a closing date of October 5th, 2011.  As well, the Ministry of Petroleum and Mineral Resources is inviting qualified companies to explore for and develop Syria's oil shale deposits.  

For the past 2 decades or more, Syria has consumed less oil than it has produced.  Domestic consumption has risen slowly over the past 2 decades from 200,000 BOPD to 263,000 BOPD in 2006 and 308,000 BOPD in 2010 according to OPEC statistics.  As shown in this chart, Syria has exported up to 400,000 BOPD back in 1996; this has declined to 149,000 BOPD in 2010, again according to OPEC:

Most of Syria's oil exports are shipped to European OECD nations including Germany, Italy and France.  In all cases, Syrian oil imports provide a very small portion of each countries daily oil needs.

Syria is estimated to have proven natural gas reserves of 8.5 trillion cubic feet (Tcf), half of which is associated with oil reservoirs.  Gas that is non-associated is found in the central and eastern part of the country.  In 2008, Syria produced 208 billion cubic feet (Bcf) of natural gas and consumed 213 Bcf.  Recent large discoveries have increased gas production to 361 Bcf per year by mid-2010 and it is expected to reach 412 Bcf per year by the end of 2010.  

Approximately 35 percent of Syria's natural gas production was injected into oil reservoirs in an attempt to boost oil production with the bulk of the remainder used domestically for power production and industrial usage.  According to the EIA, Syria plans to substitute natural gas for oil by 2014 for both power production and industrial usage since Syria does not have the refining facilities necessary to produce refined oil for these purposes.  With Syria now producing more natural gas than it consumes, it is exporting small volumes to both Lebanon and Turkey.

As we can see, Syria's overall oil and natural gas production is rather insignificant when compared to other Middle East nations, particularly nations such as Libya.  While Syria does export a small volume of oil to Europe, those importing nations could easily substitute oil from other sources for their supply of Syrian imported crude.  Perhaps this explains why there has been reluctance on the part of both Europe and America to get involved in Syria's domestic affairs; there simply is no economic reason to involve oneself as there is in the case of Libya.  More's the shame.

Wednesday, August 17, 2011

Germany's Fiscal Picture - Are Cracks Starting to Show?

Now that the German economy appears to have sideswiped by the "Euro Debt Plague" with the announcement of near zero growth, I thought that it was time for an update of Germany's fiscal picture to the end of June 2011.  This covers the first half of Germany's fiscal year which runs from January to June.

Germany's Finance Ministry provides a Monthly Report on its budget and fiscal picture.  In July's data release, the government notes that overall expenditures were down by 3.2 percent for the first 6 months of the year to €150.3 billion compared to the previous year.  Lower interest expenditures, which consume 12 percent of the national budget, were responsible for just over 50 percent of the €5 billion drop in spending.  Fortunately for Germany, total government receipts were up 4.6 percent to €128 billion with tax revenue up 10.8 percent on a year-over-year basis with much of the increase coming from value added taxes.  When the revenue and spending sides of the ledger are combined, the deficit for the first six months of 2011 came to €22.288 billion, down from €32.877 billion in the first six months of fiscal 2010.  Here is a graph showing the estimated deficit for the full year, the first six months of 2011 and the first six months of 2010:

When expenditures are looked at in detail, year-over-year increases were highest for Education, Science, Research and Cultural Affairs (up 17.3 percent) and Health, Environment, Sport and Recreation (up 22.3 percent).  Greatest year-over-year expenditure decreases were noted in Social Security, War-Related Social Tasks and Indemnification (down 3.8 percent) and General Public Services (which includes defence) (down 1.9 percent).  Within each function, the greatest expenditure increase was for Unemployment Benefits II, government housing and heating allowances which was up 44.9 percent.  For those who aren't familiar with Germany's unemployment benefits system, the country has 2 unemployment benefits systems.  In the first, Unemployment Benefit 1, the benefit paid depends on the net wage of the recipient and is financed by money from the unemployment insurance.  The Unemployment Benefits II system is different because it enables receivers to maintain a living and the amount granted depends upon the needs of each recipient.  This benefit may be covered in part by the recipient's local municipality and benefits may include accommodation and heating expenses, child care benefits and debt and addiction counselling.

On the revenue side of the ledger, the Value Added Tax, Insurance Tax, Motor Vehicle Tax, Electricity Tax and Assessed Income tax were well above half of their projections for the full year with VAT by far the most important source of revenue, bringing in €50.387 billion in the first six months of fiscal 2011.  This is up 8.6 percent from the year before and now comprises 39.4 percent of Germany's total tax revenue.  The government take from VAT is somewhat volatile since it is impacted by changes in  consumer spending.

Now let's look at the latest debt figures for Germany:

Note that the total outstanding debt has reached €1,131.385 billion on May 31, 2011.  That's up €13.976 billion from the previous month.  Just over 47 percent of Germany's debt is considered long term with maturities of four years and longer.  Here's a chart from the Eurostat website showing Germany's debt-to-GDP up to the year 2009 in comparison to its EU-27 partners:

To meet the target of reducing the annual deficit to less than 0.35 percent of GDP by 2016, Germany needs to trim its deficit by €7.5 billion annually between 2011 and 2016.  The German Finance Ministry terms this cut in the deficit “the debt brake".  While it looks like they may well meet their target for the first half of 2011, with the release of GDP growth of only 0.1 percent (a statistical positive blip), it is quite possible that Germany is being dragged into a recessional abyss along with the rest of the Eurozone.  It is interesting to note that Germany's economy, while the strongman of the EU, has hardly been robust since the 2008 Great Recession.  Growth in the first quarter of 2011 was revised downward to 1.3 percent; this followed growth of 0.5, 1.9, 0.8 and 0.4 percent for the four quarters of 2010, hardly a massive economic expansion.  Should the German economy contract over the next quarters, it will make it difficult for the country to both cut spending and increase tax revenue, both of which are essential to meeting their "debt brake" target.

In closing, let's take a brief look at one interesting economic statistic for Germany.  Here's a detailed look at both inflation and deflation in Germany's economy:

If you live in Germany and happen to like pepper, you're in luck!  If you happen to be a coffeeholic, you're not.  Overall, Germany's inflation rate reached 2.4 percent in July 2011.

It will be interesting to see if Germany and France are able to sustain their weaker Eurozone partners including Greece, Spain and Italy over the coming months.  It will not be an easy task, particularly if the German economy begins to contract over the coming months as Europe and the rest of the world are once again heading back toward recession.  When the "strongman" of Europe is showing near zero economic growth, all bets for Europe's economy are off. 

Which Republican Presidential Candidate is a Gold Bug?

In light of all of the hubbub about the ability of the United States to incur higher levels of sovereign debt and the associated discussion of the reality of the fiat currency world, I thought that this little news item was most interesting. 

Before I get to the subject of this posting, some of you may be aware that August 15th was the 40th anniversary of the end of the Bretton Woods system.  On August 15th, 1971, President Richard Nixon put an end to the trading of gold at a fixed price of $35 an ounce, officially launching currencies that would, in time, be worth far less than what they were in 1971.  This was the end of the gold standard; henceforth, central bankers around the world would be able to print as much currency as they wished without regard for the ultimate consequences because the paper was no longer linked to a finite commodity.

Here is President Nixon's speech on that fateful day:

I find his speech rather interesting in light of what is happening in the American economy today.  Notice that the President dismisses the "bugaboo...of devaluation" and insists that the dollar will be just as valuable on that day as it will be tomorrow and that the action will "...stabilize the dollar". 

Here's a chart of the USD index since 1981 showing just how wrong President Nixon was:

Note how the dollar is currently sitting very close to a 30 year low when measured in terms of a basket of other world currencies?

Now on to the subject of this posting.  I stumbled on this information yesterday and spent a bit of time today trying to find the original documents since my preference is to source the original material rather than a press release from the mainstream media.

Here is a screen capture of the document in question, a portion of the Public Financial Disclosure document for Presidential candidate Mitt Romney :

I realize that it is very difficult to read but the bottom line on the screencap states that one Mitt Romney, GOP candidate for the President of the United States, owns between $250,001 and $500,000 of gold.  That's between 140 and 285 ounces of gold.  While not a huge amount when compared to his total assets of $260 million, it is still a significant holding considering that most Americans do not own physical gold other than the odd piece of jewelry and whatever resides in their mouth as dental work!  While the mainstream media focussed on the rather impressive total (that is, if you happen to like money), I thought that "devil was in the details".

If Mitt Romney becomes President, it will be interesting to see if he'll ever sign his name to legislation that outlaws private possession of gold should the economic merde hit the fan as was the case when Executive Order 6102 was passed in April of 1933 by President Franklin D. Roosevelt as shown on this poster:

One might also wonder if Mr. Romney doesn't trust the long-term value of the fiat currency that his Party created four decades ago?  That should give voters something to ponder!

Monday, August 15, 2011

Japan's Fiscal Picture - An Update on the World's Second Most Indebted Nation

For the past month or thereabouts, the mainstream media has heavily covered the debt situation in both the United States and the Eurozone.  That's proven to be fortunate for the world's second largest debtor nation in terms of both nominal debt and their debt-to-GDP ratio.  This nation's debt is substantially larger than that of the entire EA-16 (euro area) sovereign debt combined and they have the second highest debt-to-GDP ratio in the world yet, recently, I have seen very little coverage of this country in the business section of the world’s newspapers.

In it's most recent data release in early August, Japan's Ministry of Finance reports that they have a total of ¥9,438,096,000 million in government bonds and outstanding borrowing on June 30th, 2011 which they term "Central Government Debt".  For those of you that aren't familiar with those really big yen numbers, that works out to $12.2573 trillion using a conversion of ¥77 to the United States dollar.  That's up ¥194,500,000 million or $252.597 million from the previous quarter.  Japan's debt was last downgraded by the esteemed Standard & Poor's in January 2011 from AA to AA-minus and Moody's warned of a possible downgrade by putting Japan's Aa2 rating on review.  Interestingly enough, according to a report in the Financial Times, after the downgrade in January, foreigners snapped up Japanese bonds at a rate that was higher than in the previous three months!  This is very similar to what happened just after S&P downgraded the United States' debt; Treasury prices rose and yields declined as investors fled to "safety".  Apparently, investors seem not to care what the ratings agencies have to say.

Here is a bar graph showing the rise in Japan's sovereign debt since the mid-1960s:

Notice that the long-term debt at the end of fiscal 2011 is expected to reach 184 percent of GDP by the reckoning of Japan's own government.  That puts Japan in the unenviable second place position in the debt-to-GDP race after the fiscally responsible government of Robert Mugabe, Esteemed Leader of Zimbabwe.

Japan is in the fortunate situation that most of its government debt is owned by its own citizens.  In fact, as shown on this graph, only approximately 5 percent of Japan's government bonds are held by non-Japanese citizens:

This is in sharp contrast to the United States where approximately 50 percent of its sovereign debt is held overseas making the U.S. more vulnerable to overseas bond holders selling their holdings en masse, pushing prices down and yields up.

Japan's proposed budget for fiscal 2011 was set in December of 2010 and expenditures were expected to drop by only 0.1 percent from the previous year.  Debt service charges are up modestly on a year-over-year basis to ¥21,549.1 billion, consuming 23.3 percent of the total budget.  Social Security expenditures are projected to rise by 5.3 percent (the highest percentage increase on a year-over-year basis) to ¥28,707.9 billion, consuming 31.1 percent of the total budget, the largest single expenditure as shown on this pie chart:

Social Security payments in Japan have risen from 11.1 percent of the total budget in 1960 to 16.6 percent in 1990 and 19.7 percent in 2000.  Japan has one of the world’s oldest populations and its aging demographic will be experienced by many nations of the world as the baby boomer generation slowly but surely reaches their senior years.

This graph shows how expenditures (shown with a purple line) have increasingly outstripped tax revenues (blue line) since the mid-1970s:  

The bars show government bond issuances that have been used to fill the gap between revenue and expenditure.  It is interesting to note that the number of government bonds issued has risen markedly since the early 1990s when less than ¥7.5 trillion of bonds were issued on an annual basis.  For the past 3 years including the projection for 2011, the number of bonds issued on an annual basis has risen to an average of ¥46.9 trillion ($609 billion).

The March 11th earthquake also had a massive impact on the government's bottom line.  On April 22nd, 2011, the Japanese government issued a Supplementary Budget to cover expenditures related to restoration of the areas affected.  The total estimated expense reached ¥4015.3 billion or $52.15 billion, an increase of 5.67 percent on a budget that was originally set at ¥70,862.3 billion for the entire fiscal 2011 year.  It's interesting to see how a natural disaster can throw off a country's plans for fiscal improvement.  One need think only of the impact of a bad hurricane season to note the impact on America’s economy and accompanying government emergency expenditures.

Despite all of this fiscal imbalance, Japan's interest rates are extremely low.  Here's a graph showing Japan's 10 year bond rate since 1987:

Notice how the rate has dropped to below 2 percent and remained stable at that level since the late 1990s?  That low interest rate has been responsible for Japan's federal government remaining solvent.

Here's an interesting graph showing how the interest rate on Japans Government Bonds has dropped over the past 35 years from 7.4 percent in 1975 to 1.4 percent in 2009:

As in the case of the United States, if interest rates in Japan were to rise to normal historical levels, both countries would find themselves in a dire situation as interest payments on their sovereign debt would rise at the same time as outlays for baby boomer social programs were rising.  My suspicion is that as interest payments rise, many governments around the world will be forced to decide whether to pay their creditors or cut spending on social entitlement programs…or both.

Welcome to our future.

Wednesday, August 10, 2011

Youth Unemployment in the Eurozone - Will it lead to further unrest?

With all of the youth-inspired unrest in the United Kingdom over the past few days, I thought that it would be interesting to look at the social issues facing young people in the U.K., particularly their employment prospects and compare their issues to those facing the youth of other EU and extra-EU nations.  

In the second quarter of 2011, youth unemployment in the United Kingdom fell to 19.7 percent with 917,000 unemployed 16 to 24 year olds.  This is a drop of 0.7 percentage points from the previous quarter when there were 959,000 unemployed youth, the highest since record-keeping began in 1992.  The statistics also showed that there were 75,000 youth that had not held a job for two years, an increase of 43 percent from a year earlier.  As we saw in the case of Egypt, perhaps at least some of the actions of young Brits over the past few days is related to a sense of hopelessness rather than just being completely attributable to hooliganism.

Here is a look at some interesting youth employment statistics compared to national unemployment statistics for several countries around the world:

United Kingdom 16 to 24 years of age: 19.7 percent compared to 7.7 percent nationally.

France 15 to 24 years of age: 22.8 percent compared to 9.7 percent nationally.

Greece 15 to 24 year olds: 43.1 percent compared to 15.8 percent nationally.

Canada 15 to 24 year olds: 14.1 percent compared to 7.2 percent nationally.

United States 16 to 19 year olds: 25.0 percent compared to 9.1 percent nationally.

Here is a graph comparing the total unemployment rate for the EU-27, the EU, Japan and the United States:

Here is a graph showing the rise in youth unemployment across the Eurozone over the past decade:

Here is a chart showing the actual statistics for the year 2009 showing how much higher unemployment for those EU citizens under the age of 25 is when compared to unemployment for those between the ages of 25 and 74 years:

The youth unemployment rate in the EU-27 has been two to three times the rate for the total population over the last 10 years.  That cannot help but lead to trouble over the long term as a sense of hopelessness overtakes the optimism of one's early teen years.

Perhaps, in some way, this explains (but does not excuse) the anger on the streets of the United Kingdom just as it did in Egypt earlier this spring.  The social contrast between those who are elected to run the governments of Europe and North America and European and North American young adults is profound.  In recent history, the divide between our society's "ruling class" and the have nots has rarely been wider and deeper.  Anger towards the system is sometimes directed toward unexpected targets and it is that anger that appears to be contagious.

In light of the likely implementation of widespread government austerity programs as a "Hail Mary" approach to balancing decades of fiscal mismanagement, it will be interesting to see where mob anger strikes next.

The Unmitigated Failure of Quantitative Easing

Updated to March12th, 2012

Despite the cheerleading of at least one of Mr. Bernanke's Federal Reserve District Presidents as I posted here, it now appears that QE was an unmitigated failure.  This should not have come as a surprise to anyone, least of all Wall Streeters and central bankers around the world who should really know better.

As I've posted before, Japan's central bank (the Bank of Japan) has undertaken a decade-long program of QE in an attempt to jumpstart the moribund Japanese economy which has been stuck in a cycle of deflation and rising government debt for the past 20 years.   In response to this economic debacle, the BOJ undertook its initial foray into the world of quantitative easing way back in 2001 when it announced its program in March of that year.  This program has been on and off again and, in fact, the latest BOJ attempt to stimulate Japan's economy took place at the end of August 2010, when it announced that it was boosting its "special loan facility" by 10 trillion yen to 30 trillion yen.

Since it was hoped that August’s announcement by the Fed would do something to prod the U.S. stock market back to life, I thought it was time, once again, to learn a hard lesson from Japan’s experience with QE.

This is what the Nikkei looked like before the announcement in March of 2001:

It looks like Japan's market had no bottom in sight, doesn't it?  The market was off 69 percent from its peak of 38957 on December 29th, 1989 when the BOJ announced its QE experiment.

Initially, after the announcement, Japan's stock market (Nikkei 225) took off, rising by 23 percent in a matter of weeks as shown here:

Notice the nice little bump from 11819 to the 14529 level?

Unfortunately, the rally didn't last and by the end of 2002 the market was down 29 percent to the 8578 level from the pre-QE announcement level and down 50 percent from its June 2001 peak as shown here:

Now, let’s move to the present day and show what a decade of QE has done for the Nikkei 225:

Certainly, there was an opportunity to make money on Nikkei stocks when the index rose in tandem with worldwide exchanges to just over 18200 back in early July 2007 but, since that time, the index has dropped to the 9889 level, a drop of 46 percent from its high for the decade.  Also note that at the end of August 2010 when the BOJ announced its latest foray into the mysterious world of quantitative easing, that the Nikkei 225 was at the 9100 level; since then, it has only risen about  7 percent; most of that in the last month. Certainly there was an immediate rise, however, that was very short-lived and, for most of the second half of 2011, the Nikkei was below its August 2010 level.

Now let's take a brief look at Japan's benchmark interest rate for the past 21 years:

Notice how the benchmark rate has been sitting at or around zero since late 1995?  Apparently, the BOJ ran out of interest rate ammunition a long time ago, creating the need for QE.  Despite near zero interest rates, here's what's happened to inflation in Japan over the same time period:

Japan certainly has long periods of deflation, especially when one considers that interest rates have been ultra-low for a decade and a half.  Stimulation by means of quantitative easing certainly failed to prevent deflation from rearing its ugly head, didn’t it and we all know how economists despise deflation!

It looks like Mr. Bernanke is taking a page from the BOJ handbook by keeping interest rates low for the next 3 years and other central bankers threaten additional QE.  Unfortunately for Main Street, it looks like the Fed is out of stimulus ammunition so we had better not be counting on the actions of the Federal Reserve to keep our stock portfolio in positive territory.  Let’s hope that the Dow does not follow the pattern of the Nikkei 225 although it certainly appears that the Fed could well be setting us up for a rough ride.

Tuesday, August 9, 2011

America's Sliding Economy: What can the Federal Reserve Really Do?

While it is very rare that I post twice in one day, I noticed that the mainstream media is now questioning whether the Federal Reserve should or could step into the stock market to stabilize the market's steep downward slide.  The answer: according to James Bullard, President and CEO of the St. Louis Federal Reserve Bank, three short months of QE2 had already fixed the problems facing the American economy way back in February 2011.

On February 24th, Mr. Bullard gave a speech entitled "Quantitative Easing, Global Inflation and Commodity Standards" to the Bowling Green Area Chamber of Commerce.  In his speech, he acts as head cheerleader for Mr. Bernanke's QE2 program and states that:

"...(quantitative easing) is an effective tool when the policy rate is near zero..."

As proof of the success of the program which was announced by the Federal Open Market Committee in November 2010, he entertained his audience with the following slide:

That slide was soon followed by this slide:

What was next was, in fact, far different from what the St. Louis Federal Reserve Bank predicted despite the fact that signs were already in place that the negotiations over the debt and deficit ceiling issues were going to be fractious at best and that Moody's had warned the United States nearly a month and a half earlier in its January 13th, 2011 Aaa Sovereign Monitor that it had better get its house of cards in order by stating that:

"...the outlook for near-term stabilization of US government debt ratios is not promising..."

Apparently, central bankers really are not psychic despite their protestations to the contrary.  They do, however, seem to have an uncanny ability to ignore the data that doesn't fit their predictive economic models.  What is truly unnerving is that our future and the livelihood of our children lies in the hands of central bankers around the world.

America's Presidents: Who was the biggest spendthrift?

Updated to June 8th, 2012

Many Americans point accusatory fingers in one of three directions as one would suspect when discussing which President was responsible for America's crippling sovereign debt load - it is all President Obama and the Democrat's fault, blame is laid at the feet of former President Bush II or the fickle finger of accusation points to the intransigence of the Republicans.  The partisan nature of the debate got me thinking that it would be interesting to see which President is, in fact, responsible for the greatest increase in federal debt over their term as a percentage of the debt during their tenure at the helm.  This task is somewhat complicated by the fact that one has to take into account the length of the President's term to get an accurate idea of how much the debt grew on an annual basis.  When looking at this data, please note that the dollars used are not corrected for inflation.

I looked back over the past 50 years at the debt issues that faced the last 10 administrations.  For my source material, I took data from the Treasury Direct website (a virtual goldmine of information) and used their very handy monthly search function to examine the debt history for the years and months in question.  To ensure that you understand how I used the numbers, for example, for the beginning of President Nixon's term as the Big Guy, I took the debt recorded on January 31st, 1969 as linked here.  Since there is not a daily breakdown that gives us an accurate debt figure for January 20th, 1969, the debt at the end of President Johnson's term was assumed to be the debt figure recorded for January 31st, 1969 just as it was assumed to be the debt figure for the beginning of President Nixon's term.  Where Presidents did not finish their terms (i.e. JFK), I used the debt to the end of November 1963 as his final debt number as I did in the case of Nixon.

Here's the chart, in chronological order, with the debt at the beginning of each President's term, the amount in dollars by which the debt grew, the total percentage, the length of the President's term (in years and months expressed as a decimal) and the compound annual growth rate of the debt as a percentage for each year of that particular President's term:

I realize that the compound annual growth rate (here's a definition of CAGR for those who care) is a rather odd number to use and that it may not be to everyone's liking, but I found that it was most interesting to see just how much debt grew as a percentage of itself for each year that the last 10 Presidents resided in the White House.

Here's a summary of my findings in order by compound annual debt increase from least to greatest:

The lowest overall annual percentage increase in the debt award goes to President Kennedy.  During his tenure, the debt grew by only 2.24 percent annually despite the fact that there was ongoing tensions and military buildup related to both the Cold War and Vietnam as well as the ramping up of the American space program.  The same might be said for President Johnson who comes in second with an increase of only 3.17 percent per year over his five year term as President.  Surprisingly enough, the worst President for building up the debt was the much venerated President Ronald Reagan considering that the Cold War buildup ended under his tenure.  In fact, I was so surprised that I went back and triple checked the numbers and my calculations because the debt growth was so out of line with the other Administrations in this study.  Under the Reagan Administration, the debt rose a massive 188 percent or 14.18 percent on an annual basis, far worse than either the Bush I, Bush II or Obama Administrations.  I was rather surprised to note that, in comparison, Presidents Bush I, Ford and Obama added between 11 and 13.73 percent per year to the debt.  President Bush II, considered by many to be a spendthrift administration because they added a rather massive $4.9 trillion to the debt, actually added only 8.07 percent per year to the federal debt over his eight year term, the second lowest annual increase in the past 35 years and still just under 4.1 percentage points lower than President Obama who is only three years and a half into his first term.

I apologize for the brevity of this posting (it took me quite a while to assemble the data and complete the calculations) but I hope that this, for once and for all, answers the question "Which President is responsible for the debt issues facing America today?".  The numbers don't lie and they don't play political games, do they?