Are GOP Senate candidate's claims about national debt under Biden, Baldwin correct?

Eric Hovde, a businessman who is the first Republican candidate to announce a challenge to Democratic U.S. Sen. Tammy Baldwin this November, says reining in the national debt will be one of his top priorities.

Hovde has talked about the size of the national debt on his campaign website, in his first speeches to supporters, and now in a clip published March 4 that’s part of his video series "Just Facts."

Perhaps the most eye-popping claim Hovde makes is on his website, which he’s paraphrased elsewhere:

"Since the end of the 2020 fiscal year, President Biden and Senator Baldwin have added over $7.3 trillion of debt, more than the first 228 years of our nation’s history combined," his website says.

The national debt is a complicated subject, so we called in two economics experts to explain it as Hovde’s campaign kicks into gear.

Here’s what we found. 

First, let’s look at Hovde’s raw numbers. He says $7.3 trillion has been added since the end of the 2020 fiscal year, and it took 228 years for the debt to reach that same number. 

One point right off the bat: The 2020 fiscal year ended in September 2020, which means the numbers include the last few months of former President Donald Trump’s time in office. 

Overall, Hovde is "pretty close on the actual numbers," said Menzie Chinn, a public affairs and economics professor at the University of Wisconsin-Madison. 

However, Chinn said, "the basic point is that the numbers are meaningless."

Part of that is because prices have increased over time. Something that cost $1 in 1776 costs more than 30 times as much in 2023, Chinn said.

And the economy has just gotten much bigger. The first estimate from 1790 shows the economy is now 141,750 times larger, so using plain dollar comparisons doesn’t make sense, Chinn said. 

"It's not a fair comparison," agreed Kundan Kishor, economics department chair at the University of Wisconsin-Milwaukee. 

"The size of the economy is much bigger now than it used to be, and the average price level is also increasing," he said. 

So, although Hovde’s numbers look correct, economists say it’s not fair to compare them with earlier in history, when the U.S. economy was smaller and prices were lower.

Economists say a better measurement is the debt-to-GDP ratio. Gross domestic product refers to how much a country produces and gives a picture of how the economy is doing.

"Think about your credit card debt," Kishor said. If you have more income, your capacity to pay off debts is much easier. 

Currently, the debt-to-GDP ratio is around 121%, data from the Federal Reserve Bank of St. Louis shows. 

For context, when Trump took office, the ratio was around 102%. The ratio peaked around the start of the COVID-19 pandemic, reaching nearly 133%. 

The ratio has been rising since it was at 30% in 1981, Kishor said, apart from a dip around 2000 toward the end of the Clinton administration. 

So, if the debt-to-GDP ratio has been increasing for at least 20 years, how much are Biden and Baldwin responsible for? 

Let’s look into a last element in Hovde’s claim: that his opponent, and Biden, are responsible for debt increases. 

In his video, Hovde is clear in who he blames for the increase in the debt: "Joe Biden and his Democratic allies take the cake for the damage that they have done." It includes a side-by-side photo of Biden and Baldwin.

Earlier in the video, though, Hovde acknowledges that politicians over the last 15 to 20 years are also to blame for government finances. The numbers from the St. Louis Fed support that.

Featured Fact-check

Donald Trump

stated on September 29, 2024 in a rally in Erie, Pennsylvania

Vice President Kamala Harris “even wants to legalize fentanyl.”

Ben Voelkel, Hovde’s campaign spokesperson, pointed to policies such as the American Rescue Plan Act and the Infrastructure Investment and Jobs Act, which Baldwin voted for and Biden signed into law. 

The second bill, known as the Bipartisan Infrastructure Law, was also supported by 32 Republicans — and Baldwin is just one vote in Congress. The American Rescue Plan Act’s goal was to stimulate the economy during the COVID-19 pandemic.

When "something unanticipated" like the pandemic happens, Kishor said, "the government has to step in, and that leads to a temporary increase." The same thing happened during the 2008 financial crisis.

So, Hovde is correct that pandemic-era spending packages supported by Baldwin and Biden led to a spike. 

Although the ratio has since cooled off, the deficit — which is related but different to the national debt — remains above pre-pandemic levels, PolitiFact National found.

But regardless of the large increase during the pandemic, the trend of higher debt-to-GDP ratios has been around during other administrations. 

"What people usually lose track of is the fact that this is a long-run problem. One particular president or one particular party is not responsible for it," Kishor said. 

Finally, the economists do agree that the national debt is a problem. If the government has to make very high interest payments, that would come at the expense of other spending, Kishor said. 

The national debt does need to be reined in, Chinn said, through spending cuts and changes to entitlement programs such as Social Security, which are driving the debt-to-GDP ratio up over the long term.

On his campaign website — and elsewhere — Hovde says "since the end of the 2020 fiscal year, President Biden and Senator Baldwin have added over $7.3 trillion of debt, more than the first 228 years of our nation’s history combined."

Hovde’s raw numbers look correct, apart from including some of the last months of Trump’s presidency. 

But economists say it’s not meaningful to compare present-day numbers with numbers from far back in U.S. history, when the economy was much smaller and prices were lower. 

Instead, it’s better to look at the debt-to-GDP ratio, which did spike under Biden when the government spent more money to respond to the pandemic. 

Still, that ratio has been increasing under other administrations, so it’s not only the fault of Biden and Baldwin. Some Republicans also voted for the infrastructure law Hovde’s campaign mentioned.

Our definition of Half True is "the statement is partially accurate but leaves out important details or takes things out of context." That fits here.