Federal Government Debt – A Brief History

federal government debt

The United States has had Federal Government Debt virtually every year of its existence as a nation, beginning with the money borrowed to finance the Revolutionary War.   Shortly after the ratification of the U.S. Constitution, the federal government debt was reported as $75 million. 

There has really been only one brief period in our history when the federal government debt was totally eliminated.  In 1835 under President Andrew Jackson, the national debt was reduced to zero, but it quickly grew into the millions again after that.

The first dramatic increase in federal government debt occurred as a result of the Civil War.  The federal debt stood at $65 million in 1860 before the Civil War, but grew to over $1 billion in 1863, and ultimately reached $2.7 billion following the end of the Civil War. 

The next surge in federal government debt came as a result of World War I, with the federal debt reaching approximately $22 billion in the early 1920’s.  By 1940, the national debt had risen to $51 billion, and the nation’s involvement in World War II caused yet another dramatic escalation in the debt.  At the end of World War II in 1945, the federal debt stood at approximately $260 billion.  For the next 2½ decades, government debt was relatively stable, growing from $260 billion in 1945 to $366 billion in 1969. 

Since the end of 1969, however, federal government debt has grown dramatically each decade, as shown below:

 – In the 1970’s, federal government debt more than doubled, from $366 billion to $829 billion.

 – In the 1980’s, federal government debt more than tripled, from $829 billion to $2.9 trillion.

 – In the 1990’s, federal government debt almost doubled again, from $2.9 trillion to $5.6 trillion.

 – In the 2000’s, federal government debt more than doubled again, from $5.6 trillion to over $12 trillion at the end of 2009.

Some will argue that it’s unfair to look at the national debt in terms of raw dollars, because it doesn’t account for inflation or the growth of the economy.  However, even if you look at government debt as a percentage of our nation’s GDP (gross domestic product), the federal debt is increasing at a staggering rate.  In 1969, the national debt was just 38% of GDP, but it’s now approaching 90% of GDP and is expected to be over 100% of GDP by 2011 or 2012.

This uncontrolled growth of our federal government debt is simply unsustainable.  If the trend continues, the U.S. Government will be unable to meet its future obligations.  Tell your Congressman and Senators that you support a balanced budget and a reduction in the national debt. 

Thank you for visiting this site and reading this article on our federal government debt. Your interest in the national debt and related topics is very much appreciated, and you are invited to read additional articles on this site.