Our country’s Founders abhorred government debt. In his Farewell Address, George Washington urged future congresses and presidents to avoid “the accumulation of debt, not only by shunning occasions of expense, but by vigorous exertion in time of peace to discharge the debts, which unavoidable wars may have occasioned, not ungenerously throwing upon posterity the burden, which we ourselves ought to bear.”
There you have a concise summation of the traditional American ethos about a national debt: (1) spend frugally, (2) go into debt only when needed to finance war and strive to repay those debts during times of peace, and (3) don’t send the bill for current expenses to future generations to pay—an egregious example of “taxation without representation,” the unjust practice that was one of the primary reasons why Americans fought the Revolutionary War.
Thomas Jefferson echoed Washington’s sentiment, writing that saddling future U.S. residents with debt was “swindling futurity on a large scale.”
Generally, generations of U.S. leaders, regardless of political party, have striven to contain the national (i.e., federal government’s) debt. A highlight was in the mid-1830s—the only time that the national debt was essentially zero, thanks to a president who hated government debt even more intensely than Washington and Jefferson: Andrew Jackson.
In 1900, the national debt still totaled less than $1 billion. Unfortunately, the foundations of fiscal soundness were already being eroded then because of the advances of the ideology of progressivism—the notion that the federal government’s role should be expanded beyond keeping U.S. residents safe to assisting them economically.
A crucial year early in our downward fiscal spiral was 1913, both for the passage of the 16th Amendment, which authorized a Marxian (graduated) federal income tax that set the stage for massive government redistribution of wealth in subsequent decades, and for the creation of the Federal Reserve System that led to the long-term erosion of our currency’s purchasing power.
President Franklin D. Roosevelt’s New Deal agenda was the next great step toward a growing national debt. First, FDR mistakenly established the quack cure of deficit spending as the proper government response to economic downturns. Then he corrupted U.S. politics permanently by perfecting the art of buying votes by strategically distributing New Deal money (details in Burt Folsom’s superb book, “New Deal or Raw Deal?”).
The next quantum step toward ultimate fiscal dissolution was President Lyndon B. Johnson’s infamous “guns and butter” policy, by which Uncle Sam waged a War on Poverty (another progressive expansion of the role of government) and a military war in Vietnam simultaneously. By the time that LBJ left office in 1969, the national debt had grown to more than $350 billion—more than 350 times what it had been in 1900. From there, the growth of the national debt has only gotten worse.
The national debt exceeded $1 trillion for the first time in 1982. Republican President Reagan made a deal with Democratic Speaker of the House Tip O’Neill: In exchange for funding a military buildup that would help to hasten the collapse of the Soviet Union a decade later, President Reagan agreed to large increases in progressive domestic spending priorities. One interesting way to look at the trillion-dollar milestone: It took 193 years—from 1789 to 1982—for Uncle Sam to accumulate a debt of $1 trillion. Just three decades later, the federal government had added more than $1 trillion in debt every fiscal year from 2009 through 2012 and at least that much in every year since fiscal year 2020, with projections of trillion-dollar-plus annual deficits every year for as far as we can see.
