You may have trouble believing the next two sentences in this history lesson, but here goes. This week (Jan. 8) in 1835, the United States’ national debt was zero, zippo, nada, nothing. Unlike today, with a national debt of around $19 trillion — and counting — one week into the year 1835 America owed not a penny to any creditor, foreign or domestic.
The credit goes to Andrew Jackson, whose presidency I think is mixed at best, but on wiping out America’s national debt he was a zealot, having become president in 1829 when the debt was $75 million, which, back then, was a considerable sum.
Granted, most of that debt had been incurred in the seven years of war — 1776 to 1783 — that it took to gain independence from Great Britain (certainly worth the money), but President Jackson thought it was a national embarrassment that America was still carrying that debt and paying interest on it. So he set out to both drastically cut spending and raise revenue from any source he could find, and he made the last payment on that debt on January 8.
Unfortunately, and here is where my misgivings about Jackson’s presidency come in, our balanced national budget was short-lived, in great part because Jackson’s economic policies were often counterproductive. As the original Populist president, Jackson believed that his true constituency, “the people,” were suffering at the hands of unscrupulous bankers, stock jobbers and other “money men.” Therefore Jackson vetoed all attempts to re-charter the Bank of the United States, which was then the only stable and fiscally sound financial institution in the country. Subsequently the nation suffered the Panic of 1837, a five-year recession that was the nation’s worst to date and sent the national debt soaring.
What’s more, some of Jackson’s methods for paying off the original debt were merciless. A racist and rabid American Indian hater, Jackson had initiated the forced removal of Indian tribes from their native homelands in the South, along the “Trail of Tears” to the inhospitable lands of Oklahoma and Nebraska, where many Indians died both during and after that journey. To that end, he saw an opportunity to raise revenue, as well as further decimate the Indian population, by offering to sell western lands then occupied by Indians to anyone who drove the Indians off those lands. The result was $10 million in revenue and many more dead and displaced Indians.
All of that said, it is no small accomplishment that a president managed to balance our budget, especially since, to pay off our $19 trillion national debt today, every U.S. citizen would owe approximately $58,000, while every tax payer would owe around $157,000. (And counting.)
