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: 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.” By selling off federally owned land in the West, Jackson had paid off all of the national debt by January 1835. Within a year, however, an economic recession led the government to start borrowing, and it would never again be debt-free. During the Civil War, the national debt ballooned to some $2.76 billion by 1866. Economic growth in the late 19th century, accompanied by inflation, helped make debt a smaller percentage of economic output. But after World War I, the debt-to-GDP ratio hit a record high 33 percent, with a debt of more than $25 billion (roughly $334 billion in today’s dollars).