Daily TWiP – Jan. 8, 1835: U.S. national debt hits zero for the first and only time

Yup, you read that headline correctly. On Jan. 8, 1835, the public debt of the United States contracted to zero for the first and only time in our nation’s history. President Andrew Jackson was in office at the time. The contracting of the debt seems to have had more to do with the financial markets of the time than with Jackson’s leadership, but it’s still a distinction any president would be proud to have, regardless of the circumstances.

The United States has carried a public debt since its inception. The colonies didn’t have enough funds of their own to wage a successful war for independence against Great Britain, so our Founding Fathers issued loan certificates (similar to modern-day bonds) that enabled them to borrow money from France, the Netherlands, and private soon-to-be U.S citizens.

By Jan. 1, 1791, the U.S. had racked up $75,463,476.52 in debt in order to fund the American Revolution and set up its own government. The next time someone speaks philosophically about the price of freedom, you can give them the exact number down to the penny.

The debt shrank steadily, disappearing completely for that one momentous day in 1835, but it began to mount once again when the Civil War erupted in 1861. The 20th century didn’t help matters much, what with two world wars, the Cold War, and conflicts in Korea, Vietnam and the Middle East, as well as increased expenses for social programs brought on by tough economic times.

As of January 2010, thanks in part to a struggling economy and continuing conflict in the Middle East, the U.S. faces a public debt of $12,302,080,159,963.01. We’ll gladly pay that penny if someone else doesn’t mind picking up the other 12.3 trillion.

To keep track of the public debt to the penny, check out the following page on the Department of the Treasury’s Web site: http://www.treasurydirect.gov/NP/BPDLogin?application=np.