US Federal Deficits in the 20th Century

The two major peaks of the federal deficit in the 20th century occurred during World War I and World War II when the federal deficit peaked at 70 percent of federal spending. In the Great Depression and its aftermath the federal government ran deficits of about 40 percent of federal spending. But up until the Great Depression the federal government typically ran a large surplus during peacetime.

After World War II federal governments started routinely running deficits in peacetime. Deficits increased steadily from the 1950s through the early 1980s, hitting 20 percent of spending in the 1980s through the 1990-91 recession, and then declined rapidly for the remainder of the 1990s, actually hitting a surplus of about 10 percent of federal spending in 2000.

Federal deficits increased in the early 2000s, and went over 40 percent of federal spending in the aftermath of the financial crisis of 2008.

In the recovery from the Crash of 2008 deficits slowly reduced to about 10 percent of federal spending before increasing to 20 percent of federal spending at the end of the 2010s. In the COVID crisis of 2020 federal spending exceeded 40 percent of federal spending.

US Federal Deficits since the Founding

The United States government did not always run a deficit. In the 19th century the federal government typically only ran deficits during wartime or during financial crises. The government ran a deficit of over 60 percent of federal spending at the end of the war of 1812, and ran deficits through the decade after the Panic of 1837 that culminated in a deficit of 50 percent of federal spending in the US - Mexican War of 1846-48. It ran huge deficits in the Civil War, with a deficit of about 90 percent of federal spending in 1863. The federal government ran a deficit in the depressed 1890s of about 20 percent of federal spending.

Otherwise, during peacetime in the 19th century, the federal government typically ran a substantial surplus: over 50 percent of federal spending in many years before 1840, and over 20 percent of federal spending in the 1870s and 1880s.

In the 20th century the US ran a deficit during World War I, the Great Depression, World War II, and in almost all years since 1950, during peace and war.

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Debt Data Sources

Debt data is from official government sources.

• Federal debt data since 1962 comes from the president’s budget.
  
• Federal debt for 1940-1961 comes from the president’s budget.
  
• Federal debt for 1914-1939 comes from the US Treasury and St. Louis Fed.
  
• Federal debt before 1914 comes from the US Treasury
  
• All other debt data comes from the US Census Bureau.

Gross Domestic Product data comes from US Bureau of Economic Analysis and measuringworth.com.

Detailed table of debt data sources here.

Federal debt data begins in 1792.

State and local debt data begins in 1820.

State and local debt data for individual states begins in 1957.

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