The U.S. national debt is more than $26 trillion.﻿﻿ That's greater than the annual economic output of the entire country.﻿﻿

The U.S. began heading toward a debt default after threats to not raise the debt ceiling and the U.S. debt crisis in 2011. It continued with the "fiscal cliff" crisis in 2012 and government shutdown in 2013. While a debt default has yet to happen, the national debt continues to reach unprecedented levels.

Key Takeaways The debt-to-GDP ratio gives insight into whether the United States has the ability to cover all of its debt.

A combination of recessions, defense budget growth, and tax cuts has raised the national debt-to-GDP ratio to unsustainable levels.

The United States cannot afford to default on its debt without major global economic consequences.

How to Look at Debt by Year

It's best to look at a country's national debt in context. During a recession, expansionary fiscal policy, such as spending and tax cuts, is often used to spur the economy out of recession. During national threats, the United States increases military spending.

The national debt by year should be compared to the size of the economy as measured by the gross domestic product. That gives you the debt-to-GDP ratio.

You can use the debt-to-GDP ratio to compare the national debt to other countries. It gives you an idea of how likely the country is to pay back its debt.

The government creates debt with either excessive spending or deep tax cuts. If this expansionary fiscal policy boosts growth enough, it can reduce the debt. A growing economy produces more tax revenues to pay back the debt. The theory of supply-side economics says the growth from tax cuts is enough to replace the tax revenue lost. But that only occurs if taxes are too high—more than 50% of income, for example.

When the tax cuts are targeted at corporations and wealthier individuals, critics refers to this theory as "trickle-down economics," arguing that beneficiaries merely pocket the extra cash rather than distributing it to workers—exacerbating the national debt without providing economic stimulus.

Other events can also increase the national debt. For example, the U.S. debt grew after the September 11, 2011 attacks as the country increased military spending to launch the "War on Terror." Between fiscal years 2001 and 2020, those efforts cost $6.4 trillion, including increases to the Department of Defense and the Veterans Administration.﻿﻿

Debt by Year Compared to Nominal GDP and Events

In the table below, the U.S. debt by year is compared to GDP and national events since 1929. The debt and GDP are given as of the end of the third quarter, September 30, in each year to coincide with the fiscal year. That's the best way to accurately determine how spending in each fiscal year contributes to the debt and to compare it to economic growth.﻿﻿ ﻿﻿

Please note: From 1947-1976, debt and GDP are given at the end of the second quarter since, during that time, the fiscal year would end on June 30. For years 1929-1946, debt is reported at the end of the second quarter, while GDP is reported annually as quarterly figures are not available.