US Total Spending on Interest Since 1900

Total government spending on interest at the start of the 20th century was less than 0.5 percent of GDP, with local government interest expense at about 0.25 percent GDP. It vaulted to 1.8 percent of GDP in the aftermath of World War I, and then settled down to 1.3 percent of GDP by 1929 with local government interest at about 0.5 percent GDP. In the Great Depression of 1929-33 interest spending increased to nearly 2.5 percent GDP, including a big spike in local government interest to 1.1 percent GDP. By the beginning of World War II total interest expense was down to just under 1 percent GDP, with local government interest all the way down to 0.27 percent GDP. With World War II interest outlays increased to 1.85 percent GDP in 1946, with federal at 1.7 percent GDP and local down more to 0.15 percent GDP.

Throughout the 1950s and 1960s total interest expense was about 1.5 percent GDP, with federal interest pretty steady and state interest increasing to 0.12 percent GDP and local increasing to 0.23 percent GDP. In the 1970s total interest expense hit 2.0 percent GDP in 1978, with federal increasing to 1.5 percent GDP, state increasing to 0.22 percent GDP and local increasing to 0.29 percent GDP. The response to inflation in the mid to late 1970s drove total to nearly 4 percent of GDP in the recession year of 1991, with federal at 3.2 percent GDP, local 0.47 percent GDP, and state at 0.38 percent GDP.

In the late 1990s and early 2000s interest outlays dropped sharply, with total interest expense bottoming out at 2 percent GDP in 2003. This represented federal at 1.34 percent GDP, local at 0.4 percent GDP, and state at 0.27 percent GDP.

In the 2000s and 2010s total interest expense was fairly steady at 2 percent of GDP, but this has been accompanied by an increase in federal to 1.76 percent GDP in 2019 while local has decreased to 0.32 percent GDP, and state has decreased to 0.21 percent GDP.