Overview of National Debt in the U.S.

If you’ve paid attention to the news lately, you might have heard talk about the national debt. This isn’t a new issue, but debt has continued to increase at unprecedented rates.

With a problem as critical as this, it’s easy to look for someone to blame. No single president is responsible for the uptick in debt. In fact, some might be surprised to hear that the national debt has increased under almost every administration.

The U.S. national debt history is more complex than you might think, and some presidents are responsible for a greater share than others. Take a closer look at the national debt by president.

What the national debt is and how it grows

The United States often doesn’t have enough revenue to cover all of its expenses. To fund operations, it often has to borrow money, which it does in a few different ways:

• Selling bonds and other securities to investors
• Borrowing money from foreign governments
• Borrowing money from its own government agencies (intragovernmental debt)

The current national debt is about $39.2 trillion. Of that amount, intragovernmental holdings are about $7.62 trillion, and the rest is debt held by the public (including individual investors, businesses, and foreign governments)^[1].

The national debt grows each time the government runs at a deficit. When tax revenue isn’t enough to cover all expenses, the government borrows money to make up the difference.

The difference between the deficit and the debt

“Deficit” and “debt” are related terms, but they aren’t exactly alike. In any given timeframe, the national deficit is the amount of money the government spent in excess of the amount it brought in.

Here’s an example in personal finance terms. If you make $50,000 this year and spend a total of $55,000, your annual deficit is $5,000. If you have outstanding loan and credit card balances of $10,000, that’s your total debt.

How presidents influence the debt (and how they don't)

When the national debt increases during a given president’s term, it’s easy to place the blame for the growing debt on the president themselves. However, while presidents have some control over government spending, they aren’t the only ones responsible for it.

Presidents decide what kinds of policies they want to make a priority, and they sign new legislation governing taxes and spending. 

However, Congress has what’s known as “power of the purse.” That means even if a president wants to spend money, they don’t have the authority to do so without the backing of the legislature. Similarly, if Congress passes a law, the president has the power to veto it.

Even though Congress holds the power of the purse, the president can still issue executive orders that impact the national debt for better or worse. Presidents can modify tariffs or adjust regulatory environments in ways that significantly alter the country’s finances.

However, the president has no control over several factors that can impact the national debt, including:

• Global oil prices
• Mandatory government spending for programs like Medicare and Social Security
• Federal Reserve decisions regarding interest rates and monetary policy
• Recessions and other major economic events

With that in mind, take a closer look at the national debt by president.

National debt by president: A historical breakdown

The national debt has grown over the course of every administration. However, some presidents have overseen larger increases than others.

Early 20th century through World War II

During this period, the national debt underwent a massive expansion. That’s largely because of the need to fund World War I (1914-1918) and World War II (1939-1945). The Great Depression (1929-1939) also led to significant government spending to fight financial collapse and support struggling citizens.

Theodore Roosevelt kick-started this era. When he took office in 1901, the national debt stood at $1.22 billion. When he left office in 1909, the debt was at $2.64 billion. That meant that $1.42 billion was added to the debt over the course of his two terms (an increase of 116.1%)^[2].

Woodrow Wilson was in office from 1913 to 1921. His administration added an astounding $21.06 billion to the national debt, a percentage change of 722.2%. In terms of percentage increases in the national debt, he ranks #1^[3].

That massive increase wasn’t because his administration was spending recklessly. Funding World War I was a major endeavor. In addition to paying for military mobilization, the U.S. issued subsidies and loans to France, Great Britain, and other Allied nations.

However, the extreme increase in the debt was enough for legislators to express concern about the future. For the first time, Congress set a limit on the national debt. The Second Liberty Bond Act of 1917 set an aggregate debt limit of $11.5 billion^[4]. The purpose of the act wasn’t only to limit the total debt. 

By establishing a set limit instead of requiring the legislature’s approval for multiple bonds, this new debt ceiling made it possible to quickly finance war efforts.

After World War I, the Great Depression drove up the national debt even further. Franklin D. Roosevelt, who took office in 1933, developed the New Deal to help revitalize the economy and the country as a whole.

The New Deal was made up of several programs, including^[5]:

• The Civilian Conservation Corps and Works Progress Administration created jobs as well as parks, roads, and other infrastructure
• The Federal Deposit Insurance Corporation (FDIC) offered insurance for deposits to prevent bank failures like those in the Great Depression
• The Securities and Exchange Commission regulated the stock market to help prevent future crashes
• The Agricultural Adjustment Act provided subsidies to farmers growing staple crops
• The Tennessee Valley Authority produced inexpensive electricity

The New Deal helped the country turn around, but it was costly to implement. Unfortunately, the beginning of World War II coincided with the end of the Great Depression. 

Because Roosevelt’s administration was tasked with financing the war as well as battling the Great Depression, it added $26.42 billion to the national debt, a 117.2% increase.

The postwar era through the Cold War

Roosevelt died shortly before the end of World War II. Harry S. Truman oversaw the end of the war and the move into the postwar era. During this time, the national debt still grew (albeit slowly).

However, the ratio of the national debt to GDP (gross domestic product) dropped dramatically. From 1946 to 1974, the ratio fell from 106% to 23%^[6].

Reagan, Bush, and the rise of deficit spending

The national debt didn’t start dramatically growing again until the Reagan era. When Reagan took office in 1981, the national debt stood at $997.86 billion. By the end of his presidency, it was $2.86 trillion^[7].

Tax cuts and increased defense spending were the main drivers of the debt increase. The Reagan administration passed the Economic Recovery Tax Act of 1981^[8], which significantly lowered tax rates for individuals and corporations. 

The logic behind the law was that the tax cuts would drive economic growth. However, the resultant growth wasn’t enough to offset the government’s loss of revenue from the tax cuts.

Both Reagan and George H.W. Bush leaned heavily into deficit spending. The national deficit almost tripled during Regan’s two terms in office^[9].

Reagan's successor, George H.W. Bush, faced a recession. Because the savings and loan industry had been deregulated by previous administrations, it started venturing out into riskier investments. The entire industry had started to fail, so in 1989, Bush negotiated a bailout package that cost the country $100 billion^[10].

George H.W. Bush inherited a deficit of $2.86 trillion. Between the savings and loan bailout, the Gulf War, and the end of the Cold War, his administration increased the national debt to $4.19 trillion^[11].

Clinton, Bush, Obama, and the 21st century

During Bill Clinton’s presidency, the national debt grew slowly. The country benefited from the tech boom, and tax increases on wealthy Americans boosted revenue. 

Notably, Clinton’s administration was able to actually produce a budget surplus in the last four fiscal years of his presidency. This is the last recorded time in history that an administration recorded a surplus^[12].

Clinton's successor, George W. Bush, added $1.89 trillion to the national debt in his first term and $3.01 trillion in his second^[13]. Bush’s time in office was marked by several events and crises that added to the debt, including:

• The September 11 terror attacks and the resulting war on terror
• Tax cuts and the addition of Medicare prescription drug benefits
• The disaster response to Hurricane Katrina
• The 2008 financial crisis
• Government response to the auto industry crisis

During his time in office, Barack Obama had to contend with many of the same issues. Wars in Iraq and Afghanistan were ongoing, and the government funded stimulus checks, Troubled Asset Relief Program (TARP) bailouts^[14], and other efforts to help the country recover from the 2008 financial crisis.

Obama also oversaw the passage of the Affordable Care Act (ACA), which expanded healthcare coverage and introduced consumer protections. The law changed the landscape of health coverage, but it also added to the national debt. During his terms in office, the national debt increased by around $9 trillion.

Trump and Biden administrations

The Trump and Biden administrations have also added dramatically to the national debt. Trump’s first term included COVID-19 pandemic relief like the Coronavirus Aid, Relief, and Economic Security (CARES) Act^[15], which was $2.2 trillion on its own. 

The 2017 Tax Cuts and Jobs Act and an increase in defense spending also contributed to the $7.8 trillion added to the national debt (a 39.1% change)^[16].

Joe Biden’s $1.9 trillion American Rescue Plan and other pandemic recovery expenses continued to increase the debt. During his presidency, he also attempted to introduce student loan forgiveness and invest more in the country’s infrastructure.

In total, Biden added $8.45 trillion to the national debt, pushing him to #1 in terms of dollars added^[17].

Trump’s second term has seen spikes in government spending and an even further expansion of the national debt. The Department of Government Efficiency (DOGE) was designed to reduce government spending, but it was costly to implement. 

His administration introduced tariff policies to boost revenue, but that temporary revenue was offset by the passage of the One Big Beautiful Bill Act, which added trillions to the national debt^[18].

What drives debt increases across administrations?

The national debt continues to grow with each presidency. However, some presidents add more to the debt than others, and those differences involve far more than each administration’s approach to money.

Each administration encounters a different set of challenges, and often, it takes money to resolve (or attempt to resolve) those issues. There are several primary drivers of debt increases across administrations.

Wars and defense spending

Wars can easily add trillions to the national debt. Some of the biggest surges in the national debt coincided with World War I, World War II, and other conflicts. The World Wars were especially costly because the U.S. often issued loans or aid to allies.

Recessions and economic crises

The government can’t unilaterally control the economy. However, when a serious economic crisis (like the Great Depression or the 2008 recession) hits, the government will often attempt to intervene. 

Sometimes, intervention involves creating jobs to help alleviate unemployment. In other cases, it involves spending billions of dollars to bail out entire industries (like the savings and loan industries in 2008).

Tax policy and revenue

The United States instituted the federal income tax in 1913^[19]. Since then, changes in tax policy have caused shifts in revenue. When an administration increases taxes, the resulting boost in revenue can help reduce the deficit and slow the growth of the national debt.

However, tax increases are understandably unpopular, so politicians often need to weigh the career consequences of raising taxes. Tax cuts can stimulate economic growth, but historically, that growth hasn’t been enough to seriously decrease the debt.

Social program expansion

Social programs like Medicare and Social Security are necessary to support American citizens, but they are incredibly costly. Adding and amending social programs can significantly increase the total amount the country owes.

It’s also important to note that, even when no policy changes happen, spending on social programs can still increase. For example, because of the size of the baby boomer generation, Medicare spending has spiked in recent decades.

Similarly, as the cost of healthcare has continued to grow, government spending on Medicare, Medicaid, and other health-related programs has steadily risen.

How the national debt affects everyday Americans

Knowing the national debt by president can help you get a better sense of why the national debt figure is so high (and how it got there in the first place). It might sound like a problem that doesn't have much of an impact on your daily life, but unfortunately, soaring national debt takes its toll on everyday citizens, too. 

Interest rates and borrowing costs

The U.S. government borrows vast amounts of money. That means there’s less capital available to lend to regular businesses and consumers. 

When loanable funds are harder to come by, the cost to borrow those funds, otherwise known as the interest rate, increases. That means when the national debt is significant, you might end up having to pay more on a mortgage, car loan, or other credit product.

If you’ve been wondering why inflation has been so out of control recently, the national debt has something to do with it. Deficit spending floods the economy with new money, which diminishes the dollar’s value and raises prices^[20].

Government services and fiscal tradeoffs

When the government has to focus on paying off the national debt, it has to make financial tradeoffs. The cost of interest alone on a multitrillion-dollar debt is staggering. The U.S. currently pays more in interest on the national debt than it spends on national defense^[21].

To make room in the budget for debt payments, Congress has to make hard decisions about what spending to cut. 

Where the national debt stands today

Today, the national debt is about $39.2 trillion^[22]. That already sounds significant, but the debt is poised to increase even more. Over the past year, the national debt has increased at a rate of almost $90,000 per second^[23].

Politicians across the political spectrum are working to find solutions to the debt crisis, but so far, no one seems to have found a clear path to lasting change.

FAQ

Which president added the most to the national debt?

Woodrow Wilson holds the record for percentage increase (more than 722%). Joe Biden holds the record for the most dollars added in a single term (about $8.45 trillion).

What’s the difference between the national debt and the national deficit?

The national debt is the cumulative total of the country’s debts (including interest). The national deficit is the amount of outgoing funds that exceed revenue in a year.

Why does the U.S. national debt history matter?

The national debt isn’t just an abstract figure. It’s something that impacts all citizens of the U.S., and many people are feeling that impact more than ever. 

While you might not be able to reduce the national debt yourself, understanding how it happened and how it impacts you and your finances can help you more confidently navigate your own financial future.