Hi Everyone, welcome back to Fiscal Friday. We're coming atcha from the only Mall that matters. The national mall! Today we’ll discuss the history of our nation’s debt.
Our country was born into debt, roughly $75 million in 1790, after the Revolutionary War. Thomas Jefferson reduced this debt until the US borrowed to finance the war of 1812.
Our next major increase coincided with the Civil War, up from $65M in 1860 to $2.76B in 1866. It’s expensive to fight yourself!
World War I brought even more debt, financed by the sale of bonds to the US public. Post-war, our debt reached $25B.
The Great Depression is where debt gets depressing. It marked our largest peace-time increase, and sparked debate about government spending and economic growth. By 1939 our debt hit $40B.
More war, and more debt! By World War II, our debt hit $242B in 1946.
The last 20-something years is where things get gnarly. Regan’s tax cuts axed income. Defense and social spending increased. Clinton ran budget surpluses, but fudged numbers to make it happen. By ’95, our public debt reached $3.6T.
W, we have a problem… Post 9/11 spending, Medicare reform, and that little Iraq war, jacked up our debt to $5.8T. Not quite. The ’08 recession resulted in a trillion-dollar stimulus plus trillion-dollar deficits. This brought our debt to $13T. Did I mention we have an extra $5T in intergovernmental debt? Tack that on and take us to $18 trillion.
I know what you’re thinking. “What about inflation? Debt to GDP? The gold standard? What’s public and intergovernmental debt?” Don’t worry, these are on next year’s Fiscal Friday roster, so stay tuned. Bottom line: freedom isn’t free. Well, nothing is free.
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