When America Paid off the National Debt

Brian Lipshutz / July 25, 2011

Winter has turned to spring and spring has turned to summer, but Congress and the White House are still debating how to handle the limit on our national debt.  In the 1830’s, however, President Andrew Jackson set about an even more daunting task: paying the debt off entirely.  America accomplished that feat in 1835, and to this day it is the only time we have done so.

According to the US government, outstanding public debt totaled approximately $80 million (or $1.8 billion in 2010 dollars) by the start of President George Washington’s second term in 1793, and it was an immediate priority to begin paying off some of it.  By 1812, the government had managed to shrink that sum to about $45 million ($741 million in 2010 dollars).  For comparison, today’s debt is on the order of $14 trillion (with a t), albeit for a much larger economy.  Even so, President Jackson made it a priority to pay down the debt he inherited at the start of his term, just over $58 million (about $1.4 billion in 2010 dollars). (more…)