National Debt History
Since its formation, the United States had to deal with enormous public debts . Debts during the American Revolutionary War resulted in a deficit of 75,463,476.52 US dollars on the 1st of January, 1791. In the next 45 years, the debt grew gradually and then came down to zero on the 8th of January, 1835 under President Andrew Jackson and then, again grew into millions . The Civil war was the leading cause for the spurt in the debts . Although, the debt was below 65 million dollars in 1860, it exceeded 1 billion dollars within a period of three years and reached a high of 2.7 billion dollars after the war.
Subsequently, the debt fluctuated albeit slowly for the rest of the century. It grew steadily during the 1910s and the beginning of 1920s and reached 22 billion dollars as US had to pay for its involvement in the First World War . With the involvement and build up in the Second World War, the debt increased from 51 billion dollars, in the year 1940 to a high of 260 billion dollars in the year following the war. Subsequently, the growth of debt matched the inflation rate till the 1980s when the debt again skyrocketed. Within 10 years between 1980 and 1990, the debt tripled . At the end of 2005, the amount in debts reached a high of 7 .9 trillion dollars, which was 8.7 times its level in the 1980s.
Debt Ceiling:
At any point of time, there is such thing as the debt ceiling in effect . While the congress initially approved the legislation for the issuance of every debt, it was made impractical by the growth of government fiscal operations . For instance, the treasury carries more than 200 debt sales by way of auction each year for funding an amount of 4 trillion dollars in debt operations.
The Congress granted authority to the Treasury to publish such debts and for funding operations of the government, till such time as the total debt did not surmount the stated ceiling . However, every year or so, the ceiling gets raised habitually, thanks to the new laws that get passed every year or so by the United States Congress . The most recent instance happened in the month of September 2007, when the American Congress gave its nod for increasing the limit of National Debt to 9 .815 Trillion Dollars.
Inference:
Various factors can be attributed to the public debt from the period between 1861 till the year 1975. The first and the foremost factor is the result of accountancy on behalf of the treasury of the United States. The second factor is the fact that, the debt is the effect of the debt management decision brought about by the Treasury, as to the securities and the debt instruments used for financing the debt . The third factor is that the public debt was basically a budget deficit product . It needs to be understood that massive spending by the government does not add to the debt and create deficits . It is only when the revenues are insufficient for offsetting the expenditures that government considers it necessary to borrow .
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