National Debt At End of World War II

The national debt is very high now, but it has actually been higher in our history. The national debt at the end of World War I was a real dozy.

Current Debt Level

Our current debt level is $14.3 trillion, which is an obscenely high number. This represents just about 100 percent of our gross domestic product, better know as “GDP”. This percentage is a huge red flashing light from an economic perspective. Most countries that see their debt equal their GDP go into a long term economic funk that ends up with the country being a much smaller force in the world. Given this, it is hardly a surprise there is a lot of discussion on the topic these days.

World War II

As a country, we have historically handled our debt obligations very well. Economists agree that a country should try to stay below a 60 percent level of debt to GDP and we usually have done this. One big exception was during World War II. How much does it cost to fight a World War with multiple fronts? A lot. When the war started in 1939, our debt percentage was 43.8 percent. When the war ended it was 116 percent and would grow to 121 percent a year later. Within 10 years, however, we had reduced the debt to a 59.5 percentage figure.

The fact we would rack up huge amounts of debt during a war the scale of what we saw in World War II is hardly surprising. Think of the sheer resources needed to make it happen. We went $223 billion into debt, which may not sound like a ton compared to the 14.3 trillion we owe now, but keep in mind this was in 1945 and our economy was much smaller.

Current Debt Problem

Unlike 1945, we haven’t been fighting a war. Well, actually we’ve been fighting two in Iraq and Afghanistan as well as some non-war thing in Libya. Still, the costs associated with these efforts don’t account for our current huge debt problems. Instead, we are facing what are known as unfunded liabilities in the form of money due to Social Security, Medicare, Medicaid and so on. It represents an entirely different problem than the one we faced after World War II, so the solutions will have to be different.

<< More National Debt Articles

 

 

Follow Us On Twitter: