Today in History: Marking Over 40 Years of Trillion Dollar Debt
Just 42 years ago, the U.S. National Debt hit the thirteen-digit debt mark on October 22, 1981.
This trend has continued, with the national debt steadily increasing to the point that it hit over $33 trillion in September of this year, as reported by BoroPark24 here.
In 1974, the U.S. had $500 billion in debt, which doubled in seven years to reach $1 trillion under Ronald Reagan's presidency.
"One trillion dollars of debt," Reagan said about the debt in a televised address a month prior. "If we as a nation needed a warning, let that be it."
In contrast, Alexander Hamilton, the first secretary of the treasury, believed that "A national debt, if not excessive, will be to us a national blessing."
According to a Washington Post article published the day after hitting the trillion-dollar milestone, the debt was an inevitable result of tax and spending decisions made by Congress months or years prior. Forbes reported on two historic tax cuts enacted by Congress under Reagan decreased government revenue. The Economic Recovery Tax Act of 1981 and the Tax Reform Act of 1986 contributed to the national debt increasing 261% ($1.26 trillion) from $924.6 billion to $2.19 trillion.
National debt impacts consumers in a variety of ways. According to Forbes, rising national debt could lead to higher interest rates, higher product prices, lower home prices, less to spend on other government initiatives, national security issues, and lower returns on investments.