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As of 2012, the United States currently has ~16 trillion in debt.

The last five presidents have all added to the overall debt*.

Who is the last US president to decrease the total amount of debt owed by the Federal government?

*(Including Bill Clinton; it is a common misconception that he paid down debt. He paid down some of the public debt, but the amount of intra-governmental debt increased offsetting the gains he made in paying off the public debt)

Brythan
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4 Answers4

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We had "nearly" paid of the national debt in 1980. It was just below $800 billion at that point, after Truman began paying off WWII and the Great Depression:

Reagan: 1980 was 907B   - added $2.1T, up 275% in 1988 to $3T
Bush I: 1988 was $3T    - added $1.8T, up 63%  in 1992 to $4.8T
Clinton: 1992 was $4.8T - added $1.2T, up 22%  in 2000 to $6T
Bush II: 2000 was $5.1T - added $6.6T, up 129% in 2008 to $11.7T
Obama: 2008 was $11.7T  - added $4.3T, up 37%  in 2012 to $16T

Compiled directly from the numbers at the Dept. of the Treasury

But to answer the question directly, I guess the last President to pay off/reduce debt was Carter, though all of them since WWII had been doing it.

EDIT - With consideration to GDP, looking at spending vs revenue, a picture paints a thousand words. This is where each president left the Debt, as a percentage of what "they had to spend". **National Debt as a Percentage of GDP**

Alexei
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GDP
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    Just a note to readers. Don't focus too much on the percentages. For example, Bush II increased the debt by 5.7 billion and Obama by 4.3 billion, but Bush's percentage is three times as much because the debt was lower when he started. Additionally, different president had different lengths of term, different economies, different obligations created by past politicians, ect. – Casebash Dec 04 '12 at 23:59
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    True...earlier budgets also had relatively small interest on past debt, whereas the higher the debt became, the bigger it's piece of pie became in the budgets for following Presidents. – GDP Dec 05 '12 at 00:31
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    You look at debt in dollars, which is not very relevant. Also, claiming that it was almost payed back in 1980 based on that is incorrect, is was at an historical high in 1980. It was at a low point of you look at debt as a percentage of GDP, but then the last president to pay off debt was Clinton. -1 – Lennart Regebro Dec 05 '12 at 07:04
  • Well, according to the Department of the Treasury at http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm, the exact debt was $907B – GDP Dec 05 '12 at 18:26
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    @GDP: Your point being? This answer is inconsistent in it's reasoning and the claim that Carter was the last president to reduce debt is factually incorrect. – Lennart Regebro Dec 05 '12 at 19:46
  • Are these numbers adjusted for inflation? – Aarthi Dec 05 '12 at 20:21
  • @Aarthi: No they are not adjusted for inflation. – Lennart Regebro Dec 05 '12 at 23:26
  • These are the numbers on the budget at the time, and I said I guess Carter was the last to see the debt being paid down because until he left office, the amount of the debt had been steadily declining, and beginning in 1980, it has been steadily climbing. As is always the case with numbers, you can slice and dice them to whatever suits your purpose, so I simply supplied the actual balances at the end of each term. If it were as simple as we'd all like to suggest with our answers, there'd be no problems, now would there? – GDP Dec 06 '12 at 00:29
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    @LennartRegebro Also, the question has changed since the answer was given, as you'll see with the comments. You can also argue whether any president increased/decreased it if you believe it's Congress alone that determines the budget. – GDP Dec 06 '12 at 00:31
  • @LennartRegebro If possible, could you do the conversion? (There's a CPI calculator on the Fed website somewhere.) It would make this answer much stronger if all dollars were represented as being in the same year's terms. – Aarthi Dec 06 '12 at 06:23
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There are four correct answers to this question, here presented in increasing relevance:

  1. If you look at the US debt in dollar terms, the last president to reduce debt over one fiscal year was Eisenhower, who did reduce debt in the two fiscal years 1955-1957. However, during his two terms, debt increased with more than 20 billion dollars, and your question of "Who was the last president to reduce debt" probably is intended as a question of what president reduced debt over his presidency as a whole.

  2. So a more relevant answer is which was the last president to have lower debt when he exited office than when he entered it, and that was Warren G Harding, who reduced debt from 23,977 million dollars in 1921 to 22,349 million dollars in 1923. However, absolute numbers aren't that relevant in the first place, they aren't even adjusted for inflation.

  3. Adjusting for inflation it seems that the last President to have lower debt when he left office than when he entered it was Lyndon B Johnson, who had approximately 305 billion dollars in debts when he started, and 353 billion dollars six years later (I can't bother to find the monthly numbers for this). According to this site the 305 billion dollars in 1963 would have been 365 billion dollars in 1969, meaning that adjusted for inflation, Johnson reduced total outstanding debt.

  4. But even more relevant is how large the debt is as a percentage of the gross domestic product, as that gives you the most relevant information: How capable is the country of paying back that debt. And if you look at debt as a percentage of GDP, the last president to reduce debt was Bill Clinton.

    Bill Clinton started with a total debt outstanding (which includes intra-governmental debt) of from 4.2 Trillion dollars and a 6.5 Trillion dollar GDP to 5.7 Trillion dollar debt with a 9.9 Trillion dollar GDP.

    So yes, the claim that Bill Clinton increased debt is correct, if you look at the number of dollars. But as a percentage of GDP, which is the important value, he reduced it.

Lennart Regebro
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  • Bill Clinton is not correct. As explained in the original description Bill Clinton did not reduce debt levels. He reduced public debt levels, but the intra-governmental debt added exceed any gains made towards the public debt. The debt increased under Bill Clinton. –  Dec 05 '12 at 07:54
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    @Pharmakon: Bill Clinton is the best answer out of four possible correct answers. I've added more explanations and sources to explain why and show that this is so. – Lennart Regebro Dec 05 '12 at 09:17
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    Nice update! The problem with point 4 is that debt as a percentage of the GDP is no more accurate. Lets say you make 100,000 a year, and owe 50,000. You get a raise to 110,000, but you still owe 50,000. Yes the percent of debt is lower, but you still owe 50,000 in debt. Simply because revenues have increased does not mean that progress was made towards paying off the debt. The "Great Recession" is a great example of this. The revenues decreased, and the debt increased, so the percentage is now higher. Can you explain how debt as a percentage of GDP is more accurate? –  Dec 05 '12 at 15:15
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    @Pharmakon: "Accurate"? I didn't say accurate, I said it's more relevant. If you increase your income you also increase the amount of debts you can take on without crashing your economy. A country with 1 billion dollars in debt and 1 billion dollars in GDP is heavily in debt. A country with 1 billion dollars in debt and a GDP of 1 trillion dollars is practically debt free. – Lennart Regebro Dec 05 '12 at 19:37
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    I would disagree about it being relevant. The question was specifically about reducing debt. The GDP of the country is irrelevant for this question. How capable a country is of reducing debt and how much debt it actually reduced from one year to the next are two different things. Aside from that, solid answer. +1 from me. – jliv902 Dec 11 '13 at 20:00
  • @jliv902: The question is if it is reducing dept in dollars, or as a percentage of GDP, and a percentage of GDP is the more important and relevant number. I already explained why. – Lennart Regebro Dec 11 '13 at 20:18
  • You are right, I apparently missed that. Fixing. – Lennart Regebro May 13 '16 at 12:20
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To add to Lennart's already great answer, there is a fifth "correct" answer to the question:

.5. It is irrelevant.

In USA, the budgetary authority rests solely on the Houses of Congress (House of Representatives and Senate).

As such, no US President can increase or reduce debt. Only the Congress can.

(obviously, the President can have influence on the budgetary process, being the head of his own party, but legally speaking, he does not change the debt).

NOTE: This answer pertains to the original unedited version of the question which asked "Who is the last US president to pay off debt?"

user4012
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    You are absolutely correct about only congress having the authority. However, the president takes blame (or praise) for what happens during his administration. Whether or not he should is another topic. The question could be rephrased to "Who is the last president to oversee a reduction in debt?". –  Dec 05 '12 at 17:48
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    @Pharmakon - that's precisely why I answered. This site is for professional political discussions, so dispelling such a major misconception seems important. – user4012 Dec 05 '12 at 17:49
  • This is the most correct answer. Nice one. – Kevin Peno Dec 05 '12 at 18:19
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    The OP edited the question so this answer doesn't really fit anymore, and then accepted it. I'm confused – Michael Mrozek Dec 05 '12 at 18:28
  • I was too. I considered it over lunch with my coworkers. This answer does not reflect the intent of the question. I am restoring the original answer. –  Dec 05 '12 at 19:50
  • Irrelevant? The correct answer should be "None", from this point of view. ;-) – Lennart Regebro Dec 05 '12 at 23:29
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    @whoever downvoted - it's not really very sportsmanlike to downvote an answer that was completely correct at the time the question was being answered. – user4012 Dec 05 '12 at 23:39
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    @DVK: Although your answer helps dispell an important misunderstanding implied in the posters original question, the question has been updated to more accurately reflect the intention of the poster with regards to this. All this shows is that this should not have been an answer at all, it should have been a comment. – Lennart Regebro Dec 06 '12 at 06:34
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    @LennartRegebro the answer is a perfectly valid frame challenge. If anything, the asker is at fault for changing a question to invalidate existing answers. – Ekadh Singh - Reinstate Monica Sep 14 '21 at 14:20
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The last time the United States was debt free was during Andrew Jackson's presidency. It lasted entirely one year before the United States headed into a depression and the government needed to borrow money again. (NPR)

In practice, sovereign debt is rarely ever fully paid off, and this isn't normally seen as a problem as long as the debt is growing more slowly than the tax base in the long run.

Mr. November
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