The Federal Debt as a percent of GDP (1941 to 2013)
(Chart below) The federal debt as a percent of GDP was historically the lowest under Jimmy Carter in 1979 (when manufacturing and unionization had peaked). Then it rose under Ronald Reagan and continued to rise higher under George H.W. Bush. Then under Bill Clinton it dropped, but rose again under George W Bush with tax cuts and two unfunded wars. It continued to rise under Obama with bank and corporate bailouts, and also with extended government programs for those who lost jobs during the Great Recession and its aftermath.
Democrat - Franklin D. Roosevelt (1933–1945)
Democrat - Harry S. Truman (1945–1953) Highest recorded in 1946
Republican - Dwight D. Eisenhower (1953–1961)
Democrat - John F. Kennedy (1961–1963)
Democrat - Lyndon B. Johnson (1963–1969)
Republican - Richard Nixon (1969–1974)
Republican - Gerald Ford (1974–1977)
Democrat - Jimmy Carter (1977–1981) Lowest ever recorded debt in 1979
Republican - Ronald Reagan (1981–1989)
Republican - George H.W. Bush (1989–1993)
Democrat - Bill Clinton (1993– 2001)
Republican - George W. Bush (2001–2009)
Democrat - Obama (2009–2013) Approaching the record high of 1946
1939 to 2013
(Chart below) The federal debt as a percent of GDP was historically the highest after World War II (peaking in 1946 under Harry S. Truman), and fell all during the expansion of the middle-class—until manufacturing and labor unions had peaked in 1979 (and when offshoring started sending jobs overseas).
1939 to 1979
Currently our debt is on track to tie the record high set in 1946
$17 trillion in U.S. Debt, but $200 trillion in U.S. Assets
Comparing the national debt to household debt
Comparing Apples to Oranges
The U.S. may have $17 trillion in national debt, but it's not $17 trillion in the hole. The U.S. most likely has over $200 trillion or more in net assets. The U.S. government's real constraint is inflation, not solvency (which hasn't been a problem). The "national debt" is a vastly different issue than the one the GOP and media usually harps about (with regards to the budget deficit and government spending). The U.S. government can be thought of as a contingent currency issuer who can issue funds to spend, making it very different from a typical household budget.
Cullen Roche, founder of Orcam Financial Group and Pragmatic Capitalism (and the author of Understanding the Modern Monetary System) wrote a piece: The U.S. Government is not $16 Trillion in the Hole where he disputes a "very scary" report on CNBC that said the US government is "$16 trillion in the hole".
For starters, the IER estimates that total fossil fuel resources owned by the Federal government are valued at over $150 trillion alone. These assets alone are FIFTY FIVE times the amount stated in the CNBC report.
But that only scratches the surface. I haven’t even looked into the huge amount of federally owned land and buildings that would surely amount into the hundreds of billions if not trillions of dollars. There’s also the gold resources. And there’s the trillions of dollars in its own liabilities that it owns via the Fed and Social Security funds. I have no idea what all of this would add up to, but it would probably be a net worth nearing $200 trillion or more.
And none of this even touches on the operational realities behind the United States monetary system, and the fact that we’re not going bankrupt unless we choose to go bankrupt...and we’re not going to be unable to pay the bills on debt denominated in a currency we can print, unless we choose not to pay those bills.
If you had a job paying $50,000 a year and you owed the bank $50,000 on a mortgage, would you be very concerned about your debt or budget? Now imagine you also had $1 million in gold coins stashed away in assets. Now imagine you could also tax your rich neighbor. Now imagine you can also print your own money. That "household budget" and your "household debt" doesn't look so bad after all.
So should you, your children, your grandchildren and your great-great-great-grandchildren be very concerned about the national debt?
But then again, if the whole concept of taking on more debt is inconceivable to you (which is perfectly understandable), then why not reduce the national debt with taxation—and the best way to accomplish this is by taxing everybody on capital gains income according to the current marginal income rates on regular wages; and also by taxing capital gains 100% for Social Security taxes (just like 95% of all regular wage earners currently pay).
But remember...with Keynesian Economics (by borrowing and spending), the U.S. not only pulled itself out of the Great Depression, it financed and won World War II — and also created the greatest middle-class in world history. Whereas, under Obama, the "stimulus package" was not only misdirected, but it wasn't near big enough to pull us out of the Great Recession.
Personally, I would be more concerned about robots with artificial intelligence putting us all out of work by the year 2040—long before the national debt would ever be a real issue.