Only Yesterday—-How The Federal Debt Went From $1 Trillion To $18 Trillion in 33 Years

In the great fiscal scheme of things, October 22, 1981 seems like only yesterday. That’s the day the US public debt crossed the $1 trillion mark for the first time. It had taken the nation 74,984 days to get there (205 years). What prompts this reflection is that just a few days ago the national debt breached the $18 trillion mark; and the last trillion was added in hardly 365 days.

I remember October 1981 perhaps better than most because as the nation’s budget director at the time I had some splain’ to do. Ronald Reagan had waged the most stridently anti-deficit campaign since 1932 when, ironically, FDR promised a balanced budget while denouncing Herbert Hoover as a “spendthrift”. Likewise, Gov. Reagan had denounced Jimmy Carter’s red ink and promised a balanced budget by 1983.

But as 1981 unfolded and the US treasury borrowed large sums each day to fund what we were pleased to call Jimmy Carter’s “inherited deficits”, the trillion dollar national debt threshold rushed upon us. And, in truth, it came far more rapidly than had been anticipated because by the fall of 1981, the Reagan White House had enacted the largest tax reduction in American history. On top of that, it had also green-lighted a huge defense build-up, yet, as we liked to rationalize at the time, had made little more than a “down payment” on sweeping reforms of domestic spending and entitlements.

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