Very few industrialized countries run without issuing some sort of federal-level debt from time to time. For the U.S. federal government, racking up debt seems as American as baseball or apple pie.
Not all debt is bad, it can be used to help a country get through a recession or depression, fund social programs, etc. In fact, the U.S. government is issuing debt at such a low interest rate that inflation almost makes the cost to service it nothing compared to how much we are borrowing.
With that, this is what the national debt of the U.S. has looked like since 1950:
For reference, the national debt in 1940 was $42,967,531,037, the debt at the end of 2016 was approximately 19,976,827,000,000. Pre-1940 debt is so small compared to today’s debt that it would only show up as a one-pixel line all the way back to 1970.
A few other fun facts about U.S. national debt:
- National debt started being calculated in 1790 and came out to $71,060,508
- The lowest the national debt has been since then – at the start of the year – was in 1835 when the debt stood at $33,733.05
- National debt first passed: $1 Billion in 1863, $10 Billion in 1918, $100 Billion in 1943, $1 Trillion in 1982, $10 Trillion in 2008.
- 1948 was the last year which saw a reduction in the national debt from the year before.
When you add in state and local debt, the grand total reaches around $24 Trillion. Luckily, interest rates have been historically low, so just like recent federal debt, it’s relatively cheap to service. The problems really start when there is no long-term plan to pay down the debt and it grows to a point where even the interest payments – relative to the amount borrowed – eat up a significant portion of revenue.
Take what you will from these facts but it’s pretty obvious the federal government isn’t going to stop borrowing anytime soon. Of course, since the U.S. issues debt in U.S. currency, a (bad) solution coming straight out of The Simpsons could be just to print off a few trillion dollar bills.
Realistically, a small bump in inflation through printing more money would devalue the debt, raising interest rates across the board, but it may also help those who hold non-cash assets (real estate, stocks, etc.).