I’ve previously mentioned that the last time the US federal debt went down instead of up was 1957. This came up in a conversation again recently and I started thinking about the percentage change in the federal debt for each year. I looked at the period from 1958 to 2012, what I would call the modern era of federal debt.
I went back to the federal debt records, they go from 1790 to today. Dumped that data into a spreadsheet, then calculated the percentage change for each year from 1958 – 2012. I used the all actual numbers, I didn’t attempt to normalize them to 2012 dollars since each year is just a comparison of the year before.
Percentage Change in Federal Debt, 1958-2012
You can mouse over each point to see the exact value for any given year.
A few observations on this graph. First, these are all increases, no negative numbers. Next, you’ll easily notice that the year with the largest percentage increase was 1983, at 20.5%. The next highest increase was 2009, at 18.8%.
The highs weren’t what most surprised me in this data, it was the lows. In 2000 the percentage increase in federal debt from 1999 was only 0.32%. That is the smallest percentage increase since 1957. I knew that we’d reduced the yearly budget deficits during that period, but I had no idea how close we were to actually reducing the total federal debt.
For 2000 the dollar increase of the federal debt was $17,907,308,271.43, or roughly $18 billion ( yes, billion with a b ). That sounds like a significant amount, but compared to other years is very small. To give you some idea of how small, in 2001 the percentage increase was 2.35%, the dollar amount was $133,285,202,313.20, more than 7 times the amount in 2000.
I wanted to know more about what it would have taken to actually reduce the total debt in 2000. The 2000 budget request expenditures were listed as $1,765 billion. To keep things simple I’m looking at this from the point of view of how much in spending cuts we would have needed in the 2000 budget to clear $18 billion that could have been used to reduce the total federal debt.
A little bit of math shows that $18 billion was 1.02% of the $1,765 billion in spending listed in the proposed 2000 federal budget.
Lets say we could find 1.1% in reductions in the budget to go towards paying down the debt. That would get us $19.4 billion. The first $18 billion would go to cover the increase that happened in the debt, leaving a $1.4 billion reduction in the total federal debt. That is only a tiny fraction of the $5,674 billion total debt in 2000, but it would have been the first time in more than 40 years that it went down instead of up.
All totally hypothetical and vastly over simplified, but this gave me a much clearer picture of the history of the federal debt.