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The US Debt - Information and Analysis

DFIN The US Debt is a current feature for DFIN.  This will be a continuing focus for DFIN going forward.  Think of this site. DFIN as a canary in a coal mine.  i.e.: an early warning technique

It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world; Thomas Jefferson

Why Do We See This as a Problem?  

History

  • Until the mid 70s the US was focused on reducing debt.

  • The US would typically run up debt for a war

  •  After the war the governments focus was to pay off the debt

  • The US Government is not immune from the dangers of too much debt. Think back to 2007 when consumers did what they could to borrow and buy one or more homes. This did not end well as 300,000,000+ remember.                                                                                    

  • The last time the US was debt free was after the War of 1812 during the Jackson presidency

  • After WW2 a great effort was made to reduce the debt and pay for the war including tax rates as high as 91%

 


The USA Took 205 Years to Reach 1 Trillion in National Debt : The magic date was October 22, 1981. "When Ronald Reagan took office in January of that year, the gross domestic debt, as a percentage of the nation’s annual income, had reached its lowest point since 1931: 32.5 percent. As the Republican presidential nominee, Reagan had often spoken out during the campaign against deficit spending. Once ensconced in the White House, however, he encouraged Congress to spend heavily on arms while also cutting taxes. As a result, during the eight Reagan years the national debt soared.  https://www.politico.com/story/2017/10/22/us-national-debt-tops-1-trillion-oct-22-1981-243966

History of the United States Public Debt : The 2020 US Depression is accelerating the speed to our reaching the inevitable crippling debt disaster.  In May of 2020, the US debt to GDP is at highest level since WW2.


 

US National Debt Grapg


US Debt as a Percent of GDP



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