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USA Government Debt

Logscale USA Government Debt 1791 - 2008

This chart simply shows the debt of the USA on a log scale from 1791. For reference, the Constitution was adopted in 1787 and George Washington was elected president in 1789. Prior to the Constitution, each state was pretty much independent and there was very little Federal government to speak of, but we still had quite a burdern of debt from the Revolutionary War.

On a log scale, each multiple of 10 is the same distance, because a linear scale chart is just a giant "hockey stick" and doesn't show detail very well. On this chart, WWII - when the debt was 120% of the GDP shows up as barely a blip.

USA Government Debt Log Scale

USA Government Debt, Inflation Adjusted (1982 Constant Dollars) 1912 - 2008

The same chart adjusted for inflation - it doesn't look very different from the previous one, but for anyone who may say "Sure we have more debt, but that's just inflation" here it is.

USA Debt Adjusted for Inflation

USA Government Debt & GDP 1929-2008, Log Scale

Now this is an interesting scale. The data only goes back to 1929, but here you see that since WWII, the debt has always been a pretty high percentage of the GDP. Again, during WWII the debt hit 120% of GDP, and you can see the blue line crosses the purple line there, but the debt remained fairly static until the 1970s, which is roughly when Nixon took us off the Gold Standard (which said that every dollar issued by the US Government had to be backed by an equal amount of gold - you could literally trade in your dollars for gold). Now dollars are "backed by the full faith and credit of the US Government" which makes the "fiat" dollars (fiat meaning "by the order of the government").

The so-called rampant spending of the past few years has done a lot to bring the blue line of the debt up towards the purple line of the GDP.

What's interesting is that though the GDP gained relatively steadily throughout the 90s, the debt decreased quite a bit, which should throw a monkey wrench into the theory that the only reason Clinton balanced the budget was that the GDP skyrocketed and so did tax revenue.

Historians may note that The New Deal was passed in 1933 (mostly during Roosevelt's "First 100 days" in which he met with Congress for the first 100 days of his prsidency and Congress passed nearly every piece of legislation he proposed - this is the source of the "first 100 days" by which we measure all new presidents). Wikipedia has a graph of the GDP from 1920 to 1940, as well as one that charts the GDP during the Depression (from 1928 to 1942) which highlights certain important events.

USA Government Debt & GDP 1929 - 2009

If you zoom in on the very tail end of the graph at the right, you'll see that the blue line curves up ever so slightly and the purple line curves down ever so slightly in 2008. This will be an interesting chart to revisit in about 2 years time.

This chart is in Linear Scale, which is visually easier to understand.

USA Government Debt as a % of GDP 1929 - 2008

Here's the data from the previous chart, but as a percentage (Debt/GDP). So the previous charts showed the actual debt in dollars, this one shows the debt as a % of GDP, which means it's more sensitive to the swings of the economy - a bad economy + a president who spends a lot will look very bad on this chart, whereas a president who doesn't spend much, combined with a weak economy will look very good on this chart.

Again, you can see the runaway spending under Reagan & Bush Senior, the balanced budget reducing the debt under Clinton, and Bush Jr's rampant spending, especially towards the end of his presidency. The uptick in 2008 is a combination of increased spending and a worsening economy.

Roosevelt's spending under the New Deal looks especially bad as it combines a worsenening economy with a large amount of government spending, however many attribute this spending to helping to bring us out of the depression.

Debt as a % of GDP

And because someone asked for it, here's the preceding chart with a list of who was president when. (Click for full-sized version)

Sources

Page created March 1, 2009


© Mark Wieczorek