Title: National Debt - HISTORY
Headings: National Debt
National Debt
Contents
What Is the National Debt?
Debt-to-GDP Ratio
U.S. National Debt Through World War I
U.S. National Debt: Great Depression to Great Recession
What Is the Current National Debt?
Sources

Content: If revenues are greater than spending, the government can use the surplus to pay down some of the existing national debt. The two ways to reduce debt are to increase taxes or reduce spending, both of which can slow economic growth. Debt-to-GDP Ratio
The impact of the national debt can only fully be understood by comparing the debt with the federal government’s ability to pay it off. The debt-to-GDP ratio does this by dividing a nation’s debt by its gross domestic product. Investors worry about a country defaulting on its debt when the debt-to-GDP ratio reaches above 77 percent. U.S. National Debt Through World War I
The United States began incurring debt even before it became a nation, as colonial leaders borrowed money from France and the Netherlands to win their independence from Great Britain in the Revolutionary War. The Continental Congress, forerunner to the U.S. Congress, did not have the power to tax citizens, and the debt continued to grow. By 1790, it had topped $75 million, with a 30 percent debt-to-GDP ratio, according to an accounting presented that year by Alexander Hamilton, the first secretary of the U.S. Treasury. The growing U.S. economy helped decrease the debt-to-GDP ratio to below 10 percent until the War of 1812, when the country had to go deep in debt to fight Britain once again. By the time Andrew Jackson took office in 1828, the national debt was $58 million, an obligation Jackson called the “national curse.”