2009-07-11 18:48:58
When Was The Last Time That The United States Was Debt-Free?
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When was the last time that the United States had NO federal debt to speak of?
Was it 1950?
Was it 1900?
The actual answer is - 1836.
1836. Andrew Jackson was President of the United States. The Republic of Texas declared their independence from Mexico. Arkansas was admitted as the 25th state.
In short - it's been a long while since the United States had zero federal debt.
From 1792 to 1834, the United States was slowly able to whittle down the size of their debt in relation to their GDP.
In 1792, the Debt to GDP % was 35.1; by 1834, this number had been brought down to just 0.39%.
In 1835 and 1836, the United States (according to public records) had no public debt to speak of - a 0% Debt to GDP ratio that I'm sure will never be duplicated again.
Since 1836, the United States has managed to add nearly $12 trillion dollars in debt, and this number is expected to rocket higher over the next decade.
The "Panic of 1837" (and the 5 year depression that soon followed) helped to push the country back into the red, and we have never enjoyed debt-free status since.
Over the past 173 years, a number of events have conspired to push our national debt through the roof - a couple of World Wars, a number of other conflicts, a Great Depression, a number of recessions and a general distaste for maintaining a balanced budget.
This question seems almost ridiculous to ask at this point but I'll ask it anyways - will the United States ever be debt-free again?
Filed under: General Knowledge
20 COMMENTS - What Say You?
Comment by tony williams on October 28, 2009 @ 6:41 pm
Well the statement should be who cares. The debt will never go away and to call it a debt when we are the government, its our money and it just flows in circles, everyday, every year, every decade is a joke. The only things important in this country are national defense, health care, social security, education, business, and food. thanks for your time Tony
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Comment by dink on December 22, 2009 @ 5:24 pm
tony, you are an idiot.
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Comment by Michaelangelo on September 19, 2010 @ 5:08 am
I agree with you Tony. The other guy is the idiot!
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Comment by Caelen on October 25, 2010 @ 5:33 pm
Debt refers to the money owed to entities other that the government or citizens. If the government owes citizens money, it can technically just be "absorbed" by the Federal Reserve, but we can't do that for money owed other countries. We can't absorb that. The government has been spending so much money, while making so little, that they've had to invent taxes to keep themselves funded. Do you realize that all of the government's money that goes to pay off the debt only goes towards the INTEREST, rather than lowering the actual amount? That is absurd.
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Comment by bob walker on October 29, 2010 @ 5:14 am
FYI - the banks print non existing "money" to the USA and charge us interest on our own money. It is a scam. Yes I took economics in college and the Federal Reserve is not part of the US govt. what branch is it under? the exectutive? no. The legislative? no. The Judicial? no. Look on an US govt organizational chart and you will not find the Federal reserve and call the jobs line and it will tell you this is not a civil service position. cause it is not a US govt job....yes the USA gave it a charter - but it is not part of the govt.
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Comment by BRIAN on November 16, 2010 @ 2:14 pm
"In 1835 and 1836, the United States (according to public records) had no public debt to speak of - a 0% Debt to GDP ratio that I'm sure will never be duplicated again."
We can all be sure this will never happen. I'm in no way an expert, but in order to pay off the debt, wouldn't the US have to borrow the money from the Federal Reserve (with interest), thus just shifting the debt from money owed to other countries to money owed to the Federal Reserve? I agree it sounds much nicer to owe money to the Federal Reserve, rather than foreign nations, but if that were to happen, inflation would syrocket. Yeah, we better learn to eat with chopsticks, kids!
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Comment by Rob on December 05, 2010 @ 1:30 am
Tony is an idiot and Bob Walker you're spot on. Tony, our education system was once upon a time ran privatized until almost the mid 19th century now it's socialized, healthcare is heading that way, social security is a joke. All government ran programs have been absolute failures. The free market and freedom to choose is the best method of fixing these problems. The very exercise of profit and loss, one just as important as the other. The bigger the government the less freedom we have. If you're willing to give up freedom for security you deserve neither freedom nor security.
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Comment by Ben on January 17, 2011 @ 6:07 pm
it was actually only $0 on January 8, 1835 not for 2 years as you said. check your facts
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Comment by Dave Manuel on January 27, 2011 @ 3:24 am
You are right Ben - the United States had $33k in debt at the end of the 1835 fiscal year, and $37k in debt at the end of the 1836 fiscal year. Not precisely debt free, but pretty close I'd say.
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Comment by steve on January 29, 2011 @ 1:38 am
While were all bitchin about the fact well never get out of debt, the govt is making more debt as we type now. Find some thing that can be changed and bitch about that. When you speak of riding our country of debt. Your actualy talking about removing the govt in whole.
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Comment by Roger on February 26, 2011 @ 5:12 pm
If we are in debt why do we give other countries money?
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Comment by Ian on February 28, 2011 @ 8:28 pm
Well, Roger, isn't that the question?
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Comment by this kid on March 01, 2011 @ 8:27 pm
surpriisngly, our debt is not as bad as you think as compared to other countries. Besides, debt contributes to loyalty because a country that owes america money will protect its investment. Debt can be borrowed long term with very little interest.
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Comment by Steven on March 09, 2011 @ 5:55 pm
Our debt is only about 400 billion dollars away from passing the U.S. GDP according to www.usdebtclock.org. This means that if we took what everybody in America produced in the year we would barely have enough money to pay off the debt. "our debt is not as bad as you think as compared to other countries" We do have more to pay than all other countries combined. It is worse in my opinion.
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Comment by Matt on April 08, 2011 @ 8:33 pm
This kid. You appear to misunderstand. We are not owed the money by other countries and thus other countries will be loyal to us because of their debt. We owe the money to other countries. By your logic, we should be loyal to China, Japan and all of the countries to which we owe money.
Tony and Michaelangelo, you are both wrong. While we may never completly reduce the debt, it should be reduced to a manageable figure. By having an extremely large debt we pay a large interest on the money borrowed. That money comes in the form of tax dollars from your paycheck. With a smaller debt, and therefore a smaller tax burden, you can retain more of your hard earned money. And don't think that raising taxes on business will solve the problem, they just raise the price of goods to compensate.
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Comment by Steve on June 14, 2011 @ 9:14 pm
40% of the debt is owed to our own Federal Reserve. The other 60% to individuals, countries, etc. What would happen if they just wrote-off the dept to the Fed Reserve?
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Comment by Mr. $bags on June 19, 2011 @ 4:27 pm
We could be debt-free in 7 years! Great right?!!!!
All we'd have to do is not borrow any more money, not get into any wars, not pay the politicians, reduce the military to the Air Force, get rid of NASA, (of which a $350M shuttle launch is 1/200,000th of the Medicare/Medicaid unfunded liabilities) JPL, DARPA, mothball half of the military, freeze governmental "assistance" and research, Medicare, Medicaid, Social Security, DOE, DoD, EVERYTHING except for the Air Force and paying the debt.
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Comment by krug100 on July 25, 2011 @ 6:31 pm
to Mr. $bags
... and government should probably save some money to buy you a new brain...
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Comment by TJS on November 30, 2011 @ 4:44 pm
If the first commenter, Tony, is right, than why don’t we all just work for the government and get paid a $1 million per year? Everyone should read some economics and monetary policy books starting with Friedman before you draw conclusions. We are in the financial condition we are in because we have a nation where most people, including the politicians, that can’t even balance their own check book thinking they understand the economy and how it works. Our politicians have made so many promises we, the tax payers, can’t keep that we are going to look a lot like Greece in the not too distant future.
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Comment by Joseph Jove on December 27, 2011 @ 9:50 pm
Unfortunately, there are many ignorant individuals like Tony. The fact is, our national debt is a tremendous burden on our nation. The only reason this nation has not gone bankrupt as of yet, is because the Dollar is the world reserve currency. This means, that the U.S. is the only country on Earth that can print money to pay it's debt. Good? Not good! As the Federal Reserve prints more Dollars, inflation rises. As inflation rises, the money you have saved decreases in value. Sooner or later, the world will loose faith in the Dollar and it will pick another reserve currency. Then the banks will fall like dominoes, businesses won't be able to meet payroll, supermarkets will have their shelves empty and Tony will be scratching his head with an empty stomach wondering why all this is happening! It has already started, no mote AAA credit rating.
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