8 January 1835: US national debt hits $0

By selling land, collecting taxes and cutting public spending, the US national debt was brought down to $0 for the first and only time in the country’s history on this day in 1835.

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.

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Ben Judge

Ben studied modern languages at London University's Queen Mary College. After dabbling unhappily in local government finance for a while, he went to work for The Scotsman newspaper in Edinburgh. The launch of the paper's website, scotsman.com, in the early years of the dotcom craze, saw Ben move online to manage the Business and Motors channels before becoming deputy editor with responsibility for all aspects of online production for The Scotsman, Scotland on Sunday and the Edinburgh Evening News websites, along with the papers' Edinburgh Festivals website.

Ben joined MoneyWeek as website editor in 2008, just as the Great Financial Crisis was brewing. He has written extensively for the website and magazine, with a particular emphasis on alternative finance and fintech, including blockchain and bitcoin. As an early adopter of bitcoin, Ben bought when the price was under $200, but went on to spend it all on foolish fripperies.