U.S. Debt Explosion

By Ted Dieck | Recruiter’s View - Economy - Financial Markets | Jan 30, 2024

It’s hard to grasp the amount of debt U.S. citizens have allowed into their lives.  Here’s a simple graph.

In 1989, Michael Lewis published Liar’s Poker, his famous book describing the rise, then collapse of Solomon Brothers in 1987.

Early in the book (Chapter 4) Lewis quotes Henry Kaufman, a.k.a. Dr. Gloom:

“One of the most remarkable things that happened in the 1980’s was [the] sharp explosion in debt, way beyond any historical benchmark.  It was way beyond anything you would have expected relative to GNP, relative to monetary expansion that was taking place.”

Federal Debt Graph

Here, I invite you to see how trivial that statement was, compared to today.

Take a look at the St. Louis Fed’s Total Public Debt graph.  https://fred.stlouisfed.org/series/GFDEBTN

It’s unbelievable.

U.S. Debt History

On January 8, 1835 President Andrew Jackson paid off the entire United States national debt.  U.S. debt was $0.00.

In the crazed 1980’s (150 years later), the Federal Total Public Debt never touched $3 trillion.

U.S. Debt Today

Today, that debt is ten times as much, exceeding $30 trillion.

In Q1 of 2020, debt was $23 trillion.

Just two years later, debt had risen 30% to $30 trillion.

30% in two years.

And that’s while interest rates were low.