Patt Morrison for July 25, 2011

The history of American debt: when did we first borrow, how did it get so out of control?

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"Washington Crossing the Delaware," by Emanuel Gottlieb Leutze, depicts the first event that required our nation to run a deficit.

It all started with $75 million in loans made to the new United States of America during the Revolutionary War, and thus began the first American budget deficit. We managed to pay it back rather quickly and enjoyed several years of budget surpluses but the War of 1812 forced borrowing and once again we were back in debt—big wars tied to big deficits would be a recurring theme over the next 200 years. There’s a lot of blame thrown around these days, as Congressional leaders and President Obama struggle to reach a deal on raising the debt ceiling, to enable more borrowing, and chip away at a annual budget deficit that is over $14.5 trillion. But the tough truth is that deficits and debt are bipartisan phenomena to which almost every president, no matter their party or ideological affiliation, has contributed. The Civil War pushed the national debt into the unheard of $3 billion range; after World War I public debt was up to $25.5 billion; the New Deal and World War II resulted in one of the first sizable explosions in debt, up to $260 billion by 1950. Throw in LBJ’s Grand Society, the Vietnam War, the defense build up against the Soviet Union, wars in Iraq and Afghanistan, sweeping tax cuts and a brutal recession, and we find ourselves mired in this current mess.

So break out the calculators and the history books as we trace the growth of American debt, which has its roots in the very birth of the country. As Obama and Boehner, Democrats and Republicans level blame at each other for getting us into deep deficits and not doing enough to get us out, the truth is there’s 235 years worth of blame to pass around to everyone.

Guests:

Robert Dallek, presidential historian and author of several presidential biographies, including a two-volume biography of Lyndon B. Johnson; author of "The Lost Peace: Leadership in a Time of Horror and Hope, 1945-1953"

David Walker, chief executive officer of the Comeback America Initiative; former Comptroller General of the U.S. & director of the Government Accountability Office in the George W. Bush administration


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