National Debt by Year Compared to GDP and Major Events

The U.S. national debt is more than $23 trillion. That's greater than the 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. 

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 needed to spur the economy out of recession. During national threats, the U.S. increased 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.

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.

Other events can also increase the national debt. For example, the U.S. debt grew after the Sept. 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.

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 that was the fiscal year used to end on June 30. For years 1929-1946 debt is reported at the end of the second quarter. GDP is reported annually as quarterly figures are not available.