A Concise History of U.S. Central Government Debt

President Washington commented on accumulating public debt during his Farewell Address. His advice was to “use it as sparingly as possible” and avoid “occasions of expense by cultivating peace.” He was arguing that you must manage public debt otherwise the country is “ungenerously throwing upon posterity the burden which we ourselves ought to bear.”

Washington left office in 1797 and the public debt was $82 million or $708 per person in 2021 dollars. The debt was $75 million when he began his term and much of it was accumulated during the Revolutionary War. Subsequent administrations and congresses followed his advice and by 1840 the debt stood at $4 million or $9 per capita in 2021 dollars.

Over the next 20 years the debt grew to $65 million. Probably due to improvements like canals and railroads that were not all paid for by federal taxes which at that time were primarily tariffs. The debt in 1860 was still much less than when Washington left office and amounted to only $74 per head of population.

The Civil War resulted in significant tax increases and a large increase in the national gross debt. In 1870 the debt was $2.4 billion or $1,305 per person. This was almost twice the level of debt per person in 2021 dollars compared to when Washington left office. Again though, the next administrations and Congresses reduced the debt so that by 1900 it stood at $1.3 billion or $535 per person in 2021 dollars.

The debt increased during WW1 and was reduced in the decade of the 1920s so that by 1930 it was $16 billion and $2,139 per person in 2021 dollars. The first big change in the debt level came with the depression, the New Deal, and WWII. By 1945 the debt was $259 billion or $30,062 per capita in constant 2021 dollars.

The debt level remained stable well into the 1960s, but no significant reductions. In the last 35 to 40 years the increases have been out of control to where the debt in 2021 was $28 trillion and $85,732 per capita or nearly three times the per capita debt level at the end of WWII.