Fact of the Day: 8th January

On this day in 1835 the national debt of the United States was zero, for the first and only time.

Historically, the US public debt as a share of GDP increased during wars and recessions, and subsequently declined. For example, debt held by the public as a share of GDP peaked just after World War II but then fell over the following 30 years.

In general, debt held by the public increases as a result of government spending and decreases as a result of government tax or other receipts, which fluctuate in the course of the fiscal year, and in practice Treasury securities are not issued or redeemed on a day-by-day basis.

Public debt as a percentage of GDP reached its highest level during Harry Truman’s first presidential term, during and after World War II, but fell rapidly in the post-World War II period, and reached a low in 1973 under President Richard Nixon. Debt as a percentage of GDP has consistently increased since then, except during the presidencies of Jimmy Carter and Bill Clinton.

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