A historical look at US National debt from 1790 to 2025 and beyond
The national debt is basically the amount the government owe to the private sector and other holders of US Treasuries. National debt is the accumulation of government borrowing over many years. The budget deficit is the annual amount the US government need to borrow in a year. It is successive budget deficits that cause a rise in national debt.
A more precise definition. US Federal National debt is the total amount of Treasury securities held by bodies outside the federal government (mostly private sector investors, Federal Reserve and foreign private sector investors).
In Nov 2025
- Total US Federal Debt is $38 trillion (Nov 2025) 118% of GDP (St Louis Fed).
- US Federal debt held by the public is $30trillion (St Louis Fed) (95% of GDP) (St Louis Fed)
US debt through history
This graph shows national debt as a % of GDP (the size of the economy). Through these figures on national debt, we can see major events in American history.
1790s
“A national debt, if it is not excessive, will be to us a national blessing.”
Alexander Hamilton — 1781
The U.S. began with about $75 million in federal debt after the Revolution. Hamilton consolidated state debts to strengthen federal credit. After the war of independence, the Founding Fathers (with the exception of Hamilton) were concerned about government debt and over the next 40 years, great efforts were made to pay it back. This was achieved through levying Federal taxes (primarily import duties) and also economic growth from the developing US economy helped to reduce the burden. It was also a period of minimal Federal expenditure.
“I place economy among the first and most important of republican virtues, and public debt as the greatest of the dangers to be feared.”
— Thomas Jefferson to William Plumer, 1816
1835
Under Andrew Jackson, the U.S. briefly reached zero national debt — the only time in history.
Civil War Period
After the start of the Civil War in 1961, Federal debt rose sharply to finance the cost of war. It rose to over $2.7 billion (but only 35% of GDP). Congress also approved the first temporary income tax of 3% (which expired in 1872)
- After the Civil War, debt declined as the Federal Government returned to minimal government expenditure. Until the First World War, the government retained limited expenditure, although around the turn of the century, the progressive movement did encourage greater Federal intervention in some aspects of the economy.
WWI
- National debt increased during WWI as the US built up a modern army.
Great Depression
At the start of the great depression, the government retained the orthodoxy of trying to balance the budget, but the scale of the recession and unemployment of 25% caused Roosevelt to embark on a New Deal, which involved government spending financed by borrowing to try and kickstart the economy.
World War II
- World War II saw US debt reach its peak at over 113% of GDP as the government undertook massive military spending.
Post-war Period
- In the post-war period, national debt steadily fell – despite growth in federal spending on roads, a welfare state and military campaigns in Korea and Vietnam. The fall in debt to GDP was largely due to the rapid economic growth, which caused GDP to rise significantly faster than the level of debt.
1980s
By 1980, US debt was at a near-time low of 26% of GDP. This rose firstly, due to the steep recession of 1981 and then due to significant tax cuts combined with significant increases in Federal spending (in particular military spending)
“We don’t have a trillion-dollar debt because we haven’t taxed enough; we have a trillion-dollar debt because we spend too much.”
— Ronald Reagan 1981
Reagan was a champion of a smaller state, but with higher defence spending, overall government spending continued to rise and debt rose in the 1980s.
1990s
After the 1992 recession ended, the US economy returned to a period of strong economic growth – enabling a rare budget surplus and fall in debt levels during the 1990s. It was also a period of relative fiscal restraint.
2000s
Debt gradually increased in the early 2000s, with extra government spending partly on the war on terror, growing social security budgets and some tax cuts.
2008 Credit crunch
The 2008 Credit crunch and resulting financial crisis caused a rapid growth in debt as tax revenues from finance dried up. Debt began to be stabilised until 2016, when the 2016 Trump tax cuts led to small rise in debt.
Covid 2020-22
Covid caused another shock to debt levels as aspects of the economy were put in lockdown. Tax receipts fell and the government spent on emergency payments to business and consumers.
2024
There is less political interest in reducing the debt, with President Trump being more fiscally liberal than the old-fashioned Republican party.
Total US Debt (nominal figures)
- 1910 – $2.6 bn
- 1940 – $50.0 bn
- 1990 – $3,233 bn ($3.2 Trillion)
- 2021 – $28,529bn ($29 Trillion)
- 2025 – $37,000bn ($37 Trillion
- Fiscal Data Treasury.gov
US debt compared
US Debt is 123% (IMF measures) which is higher than many European economies, but less than Italy, Venezuela, Greece and Japan
This shows levels of gross government debt (2021, Source IMF). It shows that the US has one of the highest levels of gross government debt amongst major economies. See also
Forecast for National Debt – 2025- 2100
The CBO have made debt projections based on the assumption that tax policy and government spending commitments don’t change. This projection suggests debt will rise sharply. This is because
- Ageing population, leads to higher spending on pensions and health care
- Some tax receipts will fall as the working age population shrinks as a share of the population.
- Slowing economic growth
Generally, an ageing population leads to lower rates of economic growth. The US have actually done relatively better than many major economies, but still growth is lower than post-war period.
The budget of 2025 also involved tax cuts which will increase debt faster than this projection
This shows the projection of US debt for the big beautiful bill and if it is made permanent.
It is important to bear in mind, that this projection doesn’t mean it will happen. It could be that as debt rises, bond yields rise and this puts pressure on the government to increase taxes or cut spending. But, given political difficulties and rise of populism, the broad trend of rising debt could well happen.
Another reason for the projected rise in public debt is that as debt rises, the government have to spend more on debt interest payments, which means there is an added accelerator to debt rising.
US Federal Deficit
This is the annual deficit. It has mostly been in deficit since 1975
Video on US Debt
Real US Debt
To make comparisons between years, we need to adjust for inflation.
- Real debt = nominal debt – inflation
Gross debt vs Public Debt
A potential confusion is that there are two main measures of national debt
- Public debt – Debt held by investors and bodies outside Federal Government.
- Gross debt =- Public debt + securities held by departments within the Federal Government, e.g. Social Security Fund
The difference between these figures has grown in recent years.
from: wikipedia US Debt
The Public debt is the US debt held by private sector.
Gross debt includes debt that the government holds itself.
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