National debt
In economics, one must balance income and expenses. That balance has hard edges, and expenses are limited to income and actual savings on hand, without the ability to accumulate debt. Debt accrues when someone is willing lend money to be paid off over time, allowing expenses to increase beyond current income. Interest is charged for this service. National debt is manifested by selling bonds, allowing the county to deal with unexpected expenses without impoverishing the country or defaulting the government.
National debt began to accumulate with the Revolutionary War, the Louisiana Purchase, and the War of 1812, rising to $120M ($2.31B in today’s dollars) by 1815. For the rest of this article, I will use current dollar values for clarity. This was paid down to zero in 1835, under President Jackson. By the end of the Civil War, another unexpected expense, debt had climbed to $47B. To fund World War One, the national debt jumped from $73B to $318B under President Wilson.
The strong economy following the war allowed the debt to reduce to $254B by 1929, when the economic crash hit the country hard. Even though austerity and the “free market” were axions of the Republican party, debt increased to $466B under President Hoover in 1933. The dire economy swept President F. Roosevelt into office, with a socialist vice president, and the New Deal was put into place to help save the country. The expense of this social program, combined with the cost of winning World War 2, drove the debt to $3.7T by 1945.
After the war, the American economy boomed, as the only major economy still intact. In addition, our domestic oil reserves allowed us to control the global post war economy. Under President Truman the debt was reduced to $2.6T in 1953, and held steady for the next 20 years.
In 1972, the US domestic oil production peaked, and we lost control of the price of oil as OPEC gained strength. In addition, the value of the dollar had been stressed by the unfunded cost of the Vietnam War, and President Nixon cut the dollar loose from the price of gold, ending decades of global financial stability, and creating massive domestic inflation, with rates hitting 12 percent. Under Presidents Nixon and Ford, Republican austerity held sway despite the social turmoil and the debt only increased to $2.7T in 1977. President Carter was confronted with an intractable problem, with inflation hitting almost 15 percent, and debt increased to $3.1T in 1981. Even Regan’s austerity took two terms, and a debt increase to $5.9T, before inflation dropped to 4 percent, and the economy recovered.
Decades of colonialism, amplified by the massive oil reserves and revenues, created instability in the Middle East, and the US felt obliged to interfere, in the name of “national security”. Our “man on the ground”, Saddam Hussein in Iraq, became too independent, and President G. H. Bush invaded to “stabilize” the region, pushing the debt to $7.2T in 1993, to fund the war. Under President Clinton, dealing with the dot com crash, the debt rose to $8.5T in 2001. The blowback from our Middle East adventures caused the World Trade towers to fall, and President G. W. Bush responded by invading Afghanistan and Iraq again, increasing the debt to $10.4T in 2009.
Greedy financial systems finally crashed in 2008, threatening the global economy. President Obama prevented a total collapse, but pushed the debt to $21.3T by 2017. President Trump raised the debt to $27.8T to give a massive tax break to the wealthiest citizens. President Biden took office during a global pandemic, which shut down the country, and raised the debt to $31.5T today, keeping it afloat.
Since President Reagan, national debt has increased $12.6T under Republican administrations, and $15.8T under Democratic administrations. The Democrats spent the money saving the economy during the dot com crash, the housing melt down, and the Covid pandemic. The Republicans funded three invasive foreign wars, which left chaos in their wake and bad feelings about America, and tax cuts for the very wealthiest.
With a Democrat in the White house, Republicans now complain about raising the debt limit, risking default on paying bills we have already accrued, holding popular social programs hostage to protect the Trump tax breaks for the exclusive few. This is why I have little respect for the Republican party as it currently manifests.