March 11, 2006
Saturday

WASHINGTON - The national debt, inherited at the Republic's founding, grew steadily the first 192 years to $1 trillion. Now it's soared to $8.2 trillion the last quarter-century and it's about to swell again:

1791: The United States was $75.5 million in the red, mostly from Revolutionary War debt, when the first Congress finished President George Washington's budget.

1794: The Washington administration had the federal government assume all state debts run up since the Revolution. Sin taxes proposed to retire the resulting $78.4 million national debt sparked the Whiskey Rebellion.

1815: The debt jumped to $99.8 million to finance the three-year War of 1812 that Britain launched on its former colonies.

1846-48: The two-year Mexican War, financed entirely by borrowing, saw the national debt rise from $15.5 million at the war's outset to $63.1 million after the Treaty of Guadalupe Hidalgo required the United States to pay Mexico $15 million for ceding present-day Arizona, California, New Mexico and parts of Colorado, Nevada and Utah.

1861: With the debt at $90.6 million on the eve of secession, President Abraham Lincoln signed the first income tax in 1862 to defray Civil War costs. The Confederacy printed its own money and bonds to finance its fight.

1865: The U.S. debt stood at $2.7 billion at the Confederacy's surrender, five days before Lincoln's assassination.

1871: The debt was $2.2 billion when Lincoln's income tax was repealed. Tariffs and taxes on liquor and tobacco financed the federal government instead.

1913: On the cusp of World War I, with U.S. debt at $2.9 billion, the United States ratified the 16th Amendment authorizing a limited income tax.

1918: The armistice a year after America entered "the war to end all wars" saw the national debt jump to $27.4 billion.

1929: The debt was down to $16.9 billion when the Wall Street crash preceded the Depression, but rose to $22.5 billion in 1933 once President Franklin D. Roosevelt's New Deal sought to jump-start the economy.

1939: With World War II under way in Europe, the United States adopted the first broad-based income tax to finance a defense buildup. By Pearl Harbor in 1941, the debt was $48 billion.

1945: By the Axis powers' surrender, the U.S. debt was $259 billion.

1959: Post-war prosperity didn't lower the debt, which rose to $291 billion as President Dwight Eisenhower sent the first "advisers" to Vietnam.

1968: With the debt at $358 billion, President Lyndon Johnson won a 10 percent income-tax surcharge to finance the Vietnam War and the Great Society domestic programs.

1974-75: The debt was $493 billion when President Richard Nixon resigned and the last U.S. troops left Vietnam.

1981: Two oil embargoes and double-digit inflation swelled the debt to $930 billion when Ronald Reagan took office. His $750 billion tax cut, defense buildup and promise to balance the budget came up short, pushing the national debt above $1 trillion. Reagan and Congress hiked taxes the next year to get a handle on the debt.

1988: The elder George Bush won the presidency, promising, "Read my lips, no new taxes," despite a national debt of $2.6 trillion. Two years later, with the debt at $3.2 trillion and Bush poised to fight Iraq in the 1991 Persian Gulf War, he OK'd a tax increase.

1998: The longest expansion in U.S. history produced the first federal surplus since 1969, even though the debt hit $5.5 trillion. Surpluses the next three years let President Bill Clinton and Congress pay down debt and pass a $97 billion tax cut.

2001: President George W. Bush won a $1.35 trillion tax cut despite a $5.6 trillion national debt based on his claim that a government that stood to run a $5.6 trillion surplus should give taxpayers' money back. The debt was $6.2 trillion when deficits returned the next year after recession and the 9/11 attacks.

2006: Iraq, homeland security and Hurricane Katrina reconstruction costs helped the government hit the $8.2 trillion debt ceiling, prompting Bush to ask Congress to raise the debt limit to just under $9 trillion. But his call to make his 2001 and 2003 tax cuts permanent has confronted congressional estimates that put the 10-year cost at another $2 trillion.

SitNews
Stories In The News
Ketchikan, Alaska