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Timeline: 150 Years of U.S. National Debt

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This interactive visualization uses debt held by the public for its calculations, which excludes intragovernmental holdings.

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Looking Back at 150 Years of U.S. Debt

The total U.S. national debt reached an all-time high of $28 trillion* in March 2021, the largest amount ever recorded.

Recent increases to the debt have been fueled by massive fiscal stimulus bills like the CARES Act ($2.2 trillion in March 2020), the Consolidated Appropriations Act ($2.3 trillion in December 2020), and most recently, the American Rescue Plan ($1.9 trillion in March 2021).

To see how America’s debt has gotten to its current point, we’ve created an interactive timeline using data from the Congressional Budget Office (CBO). It’s crucial to note that the data set uses U.S. national debt held by the public, which excludes intergovernmental holdings.

*Editor’s note: This top level figure includes intragovernmental holdings, or the roughly $6 trillion of debt owed within the government to itself.

What Influences U.S. Debt?

It’s worth pointing out that the national debt hasn’t always been this large.

Looking back 150 years, we can see that its size relative to GDP has fluctuated greatly, hitting multiple peaks and troughs. These movements generally correspond with events such as wars and recessions.

Decade Gross debt at start
of decade
(USD billions)
Avg. Debt Held By Public
Throughout Decade
(% of GDP)
Major Events
1900-4.8%-
1910-10.0%World War I
1920-22.9%The Great Depression
1930$1636.4%President Roosevelt's New Deal
1940$4075.1%World War II
1950$25756.8%Korean War
1960$28637.3%Vietnam War
1970$37126.1%Stagflation (inflation + high unemployment)
1980$90833.7%President Reagan's tax cuts
1990$3,23344.7%Gulf War
2000$5,67436.6%9/11 attacks & Global Financial Crisis
2010$13,56272.4%Debt ceiling is raised by Congress
2020$27,748105.6%COVID-19 pandemic
2030P-121.8%-
2040P-164.7%-
2050P-195.2%-

Source: CBO, The Balance

To gain further insight into the history of the U.S. national debt, let’s review some key economic events in America’s history.

The Great Depression

After its WWI victory, the U.S. enjoyed a period of post-war prosperity commonly referred to as the Roaring Twenties.

This led to the creation of a stock market bubble which would eventually burst in 1929, causing massive damage to the U.S. economy. The country’s GDP was cut in half (partially due to deflation), while the unemployment rate rose to 25%.

Government revenues dipped as a result, pushing debt held by the public as a % of GDP from its low of 15% in 1929, to a high of 44% in 1934.

World War II

WWII quickly brought the U.S. back to full employment, but it was an incredibly expensive endeavor. The total cost of the war is estimated to be over $4 trillion in today’s dollars.

To finance its efforts, the U.S. relied heavily on war bonds, a type of bond that is marketed to citizens during armed conflicts. These bonds were sold in various denominations ranging from $25-$10,000 and had a 2.9% interest rate compounded semiannually.

Over 85 million Americans purchased these bonds, helping the U.S. government to raise $186 billion (not adjusted for inflation). This pushed debt above 100% of GDP for the first time ever, but was also enough to cover 63% of the war’s total cost.

The Postwar Period

Following World War II, the U.S. experienced robust economic growth.

Despite involvement in the Korea and Vietnam wars, debt-to-GDP declined to a low of 23% in 1974—largely because these wars were financed by raising taxes rather than borrowing.

The economy eventually slowed in the early 1980s, prompting President Reagan to slash taxes on corporations and high earning individuals. Income taxes on the top bracket, for example, fell from 70% to 50%.

2008 Global Financial Crisis

The Global Financial Crisis served as a precursor for today’s debt landscape.

Interest rates were reduced to near-zero levels to speed up the economic recovery, enabling the government to borrow with relative ease. Rates remained at these suppressed levels from 2008 to 2015, and debt-to-GDP grew from 39% to 73%.

It’s important to note that even before 2008, the U.S. government had been consistently running annual budget deficits. This means that the government spends more than it earns each year through taxes.

The National Debt Today

The COVID-19 pandemic damaged many areas of the global economy, forcing governments to drastically increase their spending. At the same time, many central banks once again reduced interest rates to zero.

This has resulted in a growing snowball of government debt that shows little signs of shrinking, even though the worst of the pandemic is already behind us.

In the U.S., federal debt has reached or surpassed WWII levels. When excluding intragovernmental holdings, it now sits at 104% of GDP—and including those holdings, it sits at 128% of GDP. But while the debt is expected to grow even further, the cost of servicing this debt has actually decreased in recent years.

U.S. federal debt costs

This is because existing government bonds, which were originally issued at higher rates, are now maturing and being refinanced to take advantage of today’s lower borrowing costs.

The key takeaway from this is that the U.S. national debt will remain manageable for the foreseeable future. Longer term, however, interest expenses are expected to grow significantly—especially if interest rates begin to rise again.

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Debt

Ranked: Government Debt by Country, in Advanced Economies

This graphic ranks government debt by country for advanced economies, using their gross debt-to-GDP ratio.

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Government Debt by Country, in Advanced Economies

The amount of debt a government holds is a crucial indicator for the sustainability of its finances.

If the debt is excessively high—especially as a percentage of gross domestic product (GDP)—it may signal challenges in meeting financial obligations, potentially leading to economic instability.

This graphic ranks government debt by country for advanced economies, using their gross debt-to-GDP ratio. The ranking is based on IMF Outlook from October 2023.

Debt-to-GDP Ratio for Advanced Economies in 2023

From 20 economies analyzed, 11 have a debt-to-GDP ratio of over 100%.

At the top is Japan, whose national debt has remained above 100% of its GDP for two decades, reaching 255% in 2023.

Economy by Gross Debt% of GDP (2023)
🇯🇵 Japan255%
🇬🇷 Greece168%
🇸🇬 Singapore168%
🇮🇹 Italy144%
🇺🇸 United States*123%
🇫🇷 France110%
🇵🇹 Portugal108%
🇪🇸 Spain107%
🇨🇦 Canada*106%
🇧🇪 Belgium106%
🇬🇧 United Kingdom104%
🇨🇾 Cyprus79%
🇦🇹 Austria75%
🇫🇮 Finland74%
🇸🇮 Slovenia69%
🇩🇪 Germany66%
🇭🇷 Croatia64%
🇮🇸 Iceland61%
🇮🇱 Israel58%
🇸🇰 Slovak Republic57%
🌎 G7 Average128%

*For the U.S. and Canada, gross debt levels were adjusted to exclude unfunded pension liabilities of government employees’ defined-benefit pension plans.

Japan has indeed been borrowing heavily, though mainly in the form of intergovernmental holdings with interest rates around 0%. However, with the country experiencing a rapidly aging population, an increasing burden of social security expenses could lead to an even larger fiscal deficit in the future.

The U.S. national debt hit $32 trillion in 2023, making up 123% of the country’s GDP. To put it in perspective, two decades ago, the U.S. debt-to-GDP ratio was less than half of what it is today. Nonetheless, it remains below the G7 average of 128%.

Germany’s ratio of 66% is the lowest in the G7, though it climbed following the COVID-19 pandemic. All EU member states attempt to keep their ratios below 60% for stability. Otherwise, when debt grows beyond what countries can pay, emergency bailouts and defaults lead to economies crashing, as seen in the European debt crisis from 2009 to 2014.

However, a high gross debt-to-GDP ratio (over 100%) is not always a cause for concern. Net ratios that take intergovernmental holdings into account can indicate exposure to debt better in the short-term, as does comparing liabilities and assets. The question is, where are debt ratios heading in the future?

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