US. National Debt by Year Compared to GDP and Major Events

U.S. Debt-to-GDP Ratio Has Risen Dramatically Since 1929

U.S. debt
•••  Photo by William Thomas Caine/Getty Images.

The U.S. national debt is more than $25 trillion. That's greater than the annual economic output of the entire country.

The U.S. began heading toward a debt default after threats to not raise the debt ceiling and the U.S. debt crisis in 2011. It continued with the "fiscal cliff" crisis in 2012 and government shutdown in 2013. While a debt default has yet to happen, the national debt continues to reach unprecedented levels. 

Key Takeaways

  • The debt-to-GDP ratio gives insight into whether the United States has the ability to cover all of its debt.
  • A combination of recessions, defense budget growth, and tax cuts has raised the national debt-to-GDP ratio to unsustainable levels. 
  • The United States cannot afford to default on its debt without major global economic consequences.

How to Look at Debt by Year

It's best to look at a country's national debt in context. During a recession, expansionary fiscal policy, such as spending and tax cuts, is often used to spur the economy out of recession. During national threats, the United States increases military spending.

The national debt by year should be compared to the size of the economy as measured by the gross domestic product. That gives you the debt-to-GDP ratio.

You can use the debt-to-GDP ratio to compare the national debt to other countries. It gives you an idea of how likely the country is to pay back its debt.

The government creates debt with either excessive spending or deep tax cuts. If this expansionary fiscal policy boosts growth enough, it can reduce the debt. A growing economy produces more tax revenues to pay back the debt. The theory of supply-side economics says the growth from tax cuts is enough to replace the tax revenue lost. But that only occurs if taxes are too high—more than 50% of income, for example.

When the tax cuts are targeted at corporations and wealthier individuals, critics refers to this theory as "trickle-down economics," arguing that beneficiaries merely pocket the extra cash rather than distributing it to workers—exacerbating the national debt without providing economic stimulus.

Other events can also increase the national debt. For example, the U.S. debt grew after the September 11, 2011 attacks as the country increased military spending to launch the "War on Terror." Between fiscal years 2001 and 2020, those efforts cost $6.4 trillion, including increases to the Department of Defense and the Veterans Administration.

Debt by Year Compared to Nominal GDP and Events

In the table below, the U.S. debt by year is compared to GDP and national events since 1929. The debt and GDP are given as of the end of the third quarter, September 30, in each year to coincide with the fiscal year. That's the best way to accurately determine how spending in each fiscal year contributes to the debt and to compare it to economic growth. 

Please note: From 1947-1976, debt and GDP are given at the end of the second quarter since, during that time, the fiscal year would end on June 30. For years 1929-1946, debt is reported at the end of the second quarter, while GDP is reported annually as quarterly figures are not available.

End of Fiscal Year Debt  Debt/GDP Ratio Major Events by Presidential Term
1929 $17 16% Market crash
1930 $16 18% Hoover signed Smoot-Hawley, reducing trade
1931 $17 22% Dust Bowl drought raged
1932 $19 33% Hoover raised taxes
1933 $23 39% FDR's New Deal increased both GDP and debt
1934 $27 40%  
1935 $29 39% Social Security
1936 $34 40% Tax hikes renewed depression
1937 $36 39% Third New Deal
1938 $37 43% Dust Bowl ended
1939 $40 43% Depression ended
1940 $43 42% FDR increased spending and raised taxes
1941 $49 38% U.S. entered WWII
1942 $72 44% Defense tripled
1943 $137 57%  
1944 $201 90% Bretton Woods
1945 $259 114% WWII ended
1946 $269 119% Truman's 1st term budgets & recession
1947 $258 105% Cold War
1948 $252 93% Recession
1949 $253 93% Recession
1950 $257 89% Korean War boosted growth and debt
1951 $255 74%  
1952 $259 72%  
1953 $266 68% Recession when war ended
1954 $271 70% Eisenhower's budgets & Recession
1955 $274 65%  
1956 $273 61%  
1957 $271 57% Recession
1958 $276 58% Eisenhower's 2nd term & Recession
1959 $285 54% Fed raised rates
1960 $286 53% Recession
1961 $289 52% Bay of Pigs
1962 $298 49% JFK budgets & Cuban missile crisis
1963 $306 48% U.S. aids Vietnam; JFK killed
1964 $312 46% LBJ's budgets & War on poverty
1965 $317 43% U.S. entered Vietnam War
1966 $320 40%  
1967 $326 38%  
1968 $348 37%  
1969 $354 35% Nixon took office
1970 $371 35% Recession
1971 $398 34% Wage-price controls
1972 $427 34% Stagflation
1973 $458 32% Nixon ended gold standard & OPEC oil embargo
1974 $475 31% Watergate & budget process created
1975 $533 32% Vietnam War ended
1976 $620 33% Stagflation
1977 $699 33% Stagflation
1978 $772 32% Carter budgets & recession
1979 $827 31%  
1980 $908 32% Volcker raised fed rate to 20%
1981 $998 31% Reagan tax cut
1982 $1,142 34% Reagan increased spending
1983 $1,377 37% Jobless rate 10.8%
1984 $1,572 38% Increased defense spending
1985 $1,823 42%  
1986 $2,125 46% Reagan lowered taxes
1987 $2,340 48% Market crash
1988 $2,602 49% Fed raised rates
1989 $2,857 50% Bush 41 budgets & S&L Crisis
1990 $3,233 54% First Iraq War
1991 $3,665 59% Recession
1992 $4,065 62%  
1993 $4,411 64% Clinton signed Budget Act
1994 $4,693 64% Clinton budgets
1995 $4,974 65%  
1996 $5,225 64% Welfare reform
1997 $5,413 62%  
1998 $5,526 61% LTCM crisis & recession
1999 $5,656 58% Glass-Steagall repealed
2000 $5,674 55% Budget surplus
2001 $5,807 55% 9/11 attacks & EGTRRA
2002 $6,228 57% War on Terror
2003 $6,783 59% JGTRRA & Iraq War
2004 $7,379 60% Iraq War
2005 $7,933 60% Bankruptcy Act & Katrina.
2006 $8,507 61% Bernanke chaired Fed
2007 $9,008 62% Bank crisis
2008 $10,025 68% Bank bailout & 
QE.
2009 $11,910 ($11,000 on Mar 16 and $12,000 on Nov 16) 83% Bailout cost $250B ARRA added $241.9B
2010 $13,562 ($13,000 on Jun 1 and $14,000 on Dec 31 90% ARRA added $400B. Payroll tax holiday ended. Obama Tax cuts. ACA. Simpson-Bowles
2011 $14,790 ($15,000 on Nov 15) 95% Debt crisis. Recession and tax cuts reduced revenue.
2012 $16,066 ($16,000 on Aug 31) 99% Fiscal cliff
2013 $16,738  ($17,000 on Oct 17) 99% Sequester. Government shutdown
2014 $17,824  ($18,000 on Dec 15) 101% QE ended. Debt ceiling crisis.
2015 $18,151 99% Defense = $736.4B
2016 $19,573 ($19,000 on Jan 29) 104% Defense = $767.6B
2017 $20,245  ($20,000 on Sep 8) 103% Congress raised debt ceiling
2018 $21,516 ($21,000 on Mar 15) 104% Trump tax cuts
2019 $22,776 ($22,000 on Feb 10, $23,000 on Oct 31 ) 106% Defense = $956.5B
2020 $24,057 (est.) ($24,000 on April 7, $25,000 on May 4) 110% COVID reduced GDP, CARES Act
2021 $28,900 (est.) 136% CBO Estimates

Article Sources

  1. TreasuryDirect. "The Debt to the Penny and Who Holds It." Accessed June 1, 2020.

  2. Bureau of Economic Analysis. "National Data: National Income and Product Accounts: Table 1.1.5 Gross Domestic Product." Accessed June 1, 2020.

  3. Watson Institute for International & Public Affairs. "United States Budgetary Costs and Obligations of Post-9/11 Wars Through FY2020: $6.4 Trillion," Page 3. Accessed April 11, 2020.

  4. TreasuryDirect. “Historical Debt Outstanding – Annual 1900-1949.” Accessed April 11, 2020.

  5. Bureau of Economic Analysis. “NIPA Tables, National Income and Product Accounts, GDP and Personal Income," Table 1.1.5. Accessed April 11, 2020.