When the USA was founded, it owed something in the order of £75m in debts to fund the War of Independence. After getting involved in the Napoleonic Wars, the debt rose to $127m. Andrew Jackson, the country's seventh president and founder of the Democratic Party, was determined to get rid of the US national debt once and for all. Jackson called the debt a "national curse" and promised to "pay the national debt, to prevent a moneyed aristocracy from growing up around our administration that must bend to its views, and ultimately destroy the liberty of our country."
He was elected in 1829, by which time the debt had fallen to $58m. Fortunately for him, the 1830s were happy times for America's economy. As business boomed, the taxes came rolling in. In addition, Jackson cut back on government spending and embarked on a spree of selling off federal land in America's West. He also abolished the country's central bank.
By the end of 1834 he was able to announce to Congress that the country would be debt free in 1835. It is the only time that a major economy has operated without debt of any kind. But it didn't last. The “Panic of 1837“ struck, the economy tanked and America succumbed to the longest depression in its history. The country has not been debt-free since. Now, America is saddled with $27trn in federal debt, or some $83,000 for every US citizen. And rising fast.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
Gold’s allure and why you should never 'pay a premium for graded coins'It is easy to become distracted by the beauty of gold, but remember why you buy it, says Dominic Frisby
-
A rebound in UK's commercial property – should you invest?UK commercial property's three-year bear market finally appears to be over, says Max King
-
31 August 1957: the Federation of Malaya declares independence from the UKFeatures On this day in 1957, after ten years of preparation, the Federation of Malaya became an independent nation.
-
13 April 1960: the first satellite navigation system is launchedFeatures On this day in 1960, Nasa sent the Transit 1B satellite into orbit to provide positioning for the US Navy’s fleet of Polaris ballistic missile submarines.
-
9 April 1838: National Gallery opens in Trafalgar SquareFeatures On this day in 1838, William Wilkins’ new National Gallery building in Trafalgar Square opened to the public.
-
3 March 1962: British Antarctic Territory is createdFeatures On this day in 1962, Britain formed the British Antarctic Territory administered from the Falkland Islands.
-
10 March 2000: the dotcom bubble peaks
Features Tech mania fanned by the dawning of the internet age inflated the dotcom bubble to maximum extent, on this day in 2000.
-
9 March 1776: Adam Smith publishes 'The Wealth of Nations'
Features On this day in 1776, Adam Smith, the “father of modern economics”, published his hugely influential book The Wealth of Nations.
-
8 March 1817: the New York Stock Exchange is formedFeatures On this day in 1817, a group of brokers moved out of a New York coffee house to form what would become the biggest stock exchange in the world.
-
7 March 1969: Queen Elizabeth II officially opens the Victoria Line
Features On this day in 1969, Queen Elizabeth II took only her second trip on the tube to officially open the underground’s newest line – the Victoria Line.
