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The Revolutionary War was the start of the national debt.
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The Founding Fathers formed a group and borrowed from France and the Netherlands to help to pay for the war.
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The Department of Finance was created to help organize the country's money.
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The U.S debt totaled at about $43 million.
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Congress was given the power to raise taxes.
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The U.S Treasury Department was created to assist the country in borrowing money and managing the debt.
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The national debt was at $64.8 million.
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When the war started debt started to grow quickly. The financial cost of the war was estimated to be $5.2 billion.
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This act created a national banking system which helped to loan money to the Government to help pay for the war.
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By the end of the Civil War the debt was at about $2.6 billion dollar. That's 40 times more than it was 5 years before.
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The debt of $2.6 billion dollars went down by $0.5 million dollars. Making it $2.1 billion dollars. This was due to the economic growth in America at that time.
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The Government had to raise money in preparation for their recent joining of the World War. In order to do that they raised the taxes.
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Liberty bonds was something the government created to help raise more money to pay for the war. Americans would buy the bonds then after they would be paid back with the value of their bonds plus interest.
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The end of the war was great in many ways but bad for us financially. The government's debt was more than $25 billion.
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While the economies in Europe were failing the economy in America was booming. We had a budget surplus. This caused the debt to go down to around $17 billion.
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The economy that was once booming collapsed. This is when the Great Depression started. People started to lose their jobs, more and more became poor, stock markets crashed. Since no one could pay taxes the government debt started to rise again.
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Franklin D. Roosevelt had a plan to help the government with it's debt. He called this plan the New Deal. This plan would give jobs to those who are unemployed. It also helped farmers to earn more money.
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After the failure of banks throughout the country during the Great Depression Franklin D. Roosevelt made sure that people would get their money back if a bank ever did fail. It also insured banks up to $5,000. This was called the Federal Deposit Insurance Corporation. Or FDIC.
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With the creation of the New Deal came more debt, since the programs within it were run by the Government. In 1933 the debt was at $22 billion then 3 years after that it grew 50%, leaving the debt at $33 billion.
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At the end of the Great Depression the government't debt was at around $49 billion. As many as 13 million Americans lost their jobs to the Great Depression, meaning not a lot of people were there to pay taxes.
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WWII had just recently started and it was already expensive. America paid for its own military as well as lending money to Britain and other countries who were fighting. This cost us about $323 billion.
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We needed help paying for the war so we took on more debt by borrowing about $211 billion. A lot of the debt was in the form of War Bonds which helped a lot. About 18% of the debt was funded by these War Bonds.
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At the end of the second world war our debt was more than $258 billion.
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The debt increased to $382.6 billion. This was due to the government improving education, helping the poor, providing better transportation, and to end racial discrimination. We also got involved in the Vietnam war.
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Foreign governments at this time owned $28.5 billion of the national debt.
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The debt reached $845 billion, this is partially due to the fact that receipts were failing to keep up with spending.
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The debt nearly reached $3 trillion. People also borrowed more from the banks.
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After the terrorist attacks on 9/11 the economy stalled. Then the government started to spend more money on homeland security and the Iraq war causing the debt to rise even more.
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The government spent more money on programs to help stimulate the economy. Although this did help it just caused the debt to rise even more.
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The debt by now has reached up to more than $12 trillion.
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We are now currently at $20.1 trillion in debt. It's still growing as of right now.
