40 Years of Trillion-Dollar Debt
On October 22, 1981—exactly 40 years ago today—America’s national debt hit $1 trillion for the first time.
“If we, as a nation, need a warning,” President Ronald Reagan said in a televised address a few weeks before the country surpassed the 13-figure debt threshold, “let that be it.”
Today, the national debt exceeds $28 trillion. In the fiscal year that concluded at the end of last month, the country added another $2.77 trillion to the pile, the Treasury Department announced just this morning. The Congressional Budget Office anticipates that the country will add at least another $1 trillion to the deficit for just about every year in the foreseeable future—and that’s even without any new spending.
If a trillion-dollar debt was a warning sign, it was ignored.
The Washington Post‘s contemporaneous coverage of the symbolic 1981 milestone is now a quaint window into a strange world. The paper reported that the country surpassed $1 billion in debt during the Civil War and then $500 billion in the mid-1970s. “In other words, half of the current trillion-dollar debt was incurred in the last seven years,” the Post noted.
Shocking, right? Now, we run up half-trillion-dollar debts every few months.
It’s true, of course, that $1 trillion doesn’t buy what it used to. That amount in 1981 would purchase about $3 trillion worth of stuff today. The best way to measure the national debt over long periods of time is to compare it to America’s gross domestic product (GDP), a rough estimate of the size of the country’s economy in a given year.
In the early 1980s, for example, even as the gross national debt exceeded $1 trillion for the first time, the national debt was less than 40 percent of GDP. The national debt is now equivalent to the country’s GDP and is on pace to be nearly 200 percent of GDP by the middle of the century, as this chart from Brian Riedl, a deficit hawk and former Republican Senate staffer now working at the Manhattan Institu
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