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• The United States was debt-free in 1835, during President Jackson’s time in office.
• He accomplished it by selling vast amounts of land, implementing tariffs, and limiting spending.
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Politicians and political pundits love to talk about the national debt whenever it suits them, fearmongering about how much we owe to other countries. But is it really as important as they say? Why don’t they ever fix it while in office?

Only one president in United States history ever managed to eliminate the national debt: Andrew Jackson. Though he has since earned more fame as a villain than as a hero for reducing the debt.

So, when was the United States debt-free? How did President Jackson accomplish it? And what were the effects?

Why Are We Talking About This?

Nobody knows what will happen in the future. The debate around the risk that public debt carries with it continues today. It is safe to say that we will never know the true negative impact of such massive amounts of debt until something catastrophic happens. That being said, even if nothing happens, it is still wise to understand what our public debt is, why we have it, and how it is used.

Why Is National Debt Important?

Government debt, also known as public debt or sovereign debt, has been a powerful tool in state building and country formation and has been directly linked to the rise and power of democracy, recent economic growth, and the modern financial market.

A government can owe money to branches of its own system, companies, private citizens, or other governments.

Besides providing financing for government projects and operation, the ability to borrow money provides a buffer during emergencies and crises, allowing the government to spend money to resolve the problem without dipping into actual cash reserves. This can include emergencies like major wars, public health pandemics, or economic downturns.

The higher government debt grows, the higher interest rates rise as well, which crowds out investment in the private sector. Countries with public debt valued at more than 80% of their GDP have slower growth rates.

High levels of public debt also make governments more vulnerable to financial and debt crises. If a government suffers during an event and cannot service the debt it has, it may lead to a debt crisis.

There are additional risks that come from excessive debt and frivolous spending, including default risk, inflation, and threats to exchange rates.

When was the United States Debt-Free?

President Andrew Jackson was inaugurated for his first term as president in 1829 and began a long campaign of eliminating the power and institution of the national bank, of which the elimination of the country’s debt was only a byproduct.

In his efforts to undermine the power of The Bank, Jackson deposited Federal money into state banks that were friendly to his policies instead of the National Bank. These banks began to invest significant amounts of this money into public works and, most importantly, land speculation and land development.

In 1834, the government began to sell off massive amounts of public land, surpassing all levels of sales in the past up to that point. It reached a peak in 1836 when it generated twelve times as much revenue from land sales as a normal year. During his presidency, Jackson sold around 63 million acres of public land. This is an area about the size of Oklahoma.

At the same time, the government was generating increased amounts of money from tariffs and saving money by carefully investing in public works like canals, roads, and bridges.

All this combined in 1835, when Jackson was finally able to pay off the entirety of the national debt. This was the first and only time the United States has been able to do so, an accomplishment that is virtually impossible today.

However, his policy of giving money to state banks and other factors led to the financial crisis known as the Panic of 1837, which forced the government to begin borrowing money again. Debt began to rise after the payoff on January 1, 1836, with a recorded public debt of $37,000.

History of United States Debt

Since Andrew Jackson’s presidency, the national debt has continually and consistently increased.

In 1860 it reached $65 million but exploded to $1 billion in 1863 when the Civil War broke out and reached $2.7 billion by the time it ended. After it ended, the government was still making attempts to create budget surpluses and paid off around 55% of the national debt over the next five decades.

During World War I the level of debt reached $25.5 billion. The subsequent government of President Harding took strong action to reduce this amount.

The debt against increased to $39.65 billion due to the Great Depression, which was around 40% of GDP. The largest increase of public debt was due to World War II when it passed 100% of GDP, or $251.53 billion (112% of GDP) in 1945.

Beginning in the 1970s, the national debt began to grow faster than the national GDP. Debt exploded during Ronald Reagan’s presidency when he heavily cut taxes and increased military spending, reaching 48.3% of GDP in 1992. It continued to increase until Bill Clinton’s time in office when it finally fell to 33%.

However, with the election of President George W. Bush, it seems any serious attempt to control the debt had gone out the window. Bush’s tax cuts, military spending, and wars in the Middle East led to the debt increasing to $6.3 trillion in 2008. As a result, the credit rating of the United States was downgraded to AA+, showing that companies were losing confidence in the government to pay off its debts. At this time, the global financial crisis caused the debt to expand to almost $12 billion by 2013.

The COVID-19 pandemic and the Great Recession heavily contributed to the level of debt today and debt continues to spiral out of control. In October of 2024, the national debt reached $35.7 trillion.

Background on Andrew Jackson

President Jackson’s accomplishment in eliminating the national debt has since been overshadowed by his less noble achievements and actions. To say that his legacy is polarizing and controversial is an understatement, even to the people of his time. His popularity as a president began its strongest decline in the 1960s, and President Obama finally announced that it would remove President Jackson’s face from the $20 bill and replace it with the image of Harriet Tubman, the famous abolitionist. Of course, notable racist and populist Donald Trump paused that initiative, but it was resumed in 2021 by President Biden.

But why has he become so unpopular? While he was initially viewed as a champion of the “common man”, he quickly earned a reputation as a power-hungry populist who seized control and caused the suffering of millions of people.

President Jackson started the national policy of removing Native Americans from their lands. Before this, Native American tribes saw themselves as free, autonomous nations, while the U.S. states believed they had a claim on the lands they wanted. He supported the states that passed new laws giving themselves jurisdiction over Native American lands, and the people within them.

In 1830, he finally signed the Indian Removal Act which gave him the right to negotiate native treaties and buy or seize native lands. It was meant to be a voluntary relocation, but Jackson implemented it as mandatory. He used bribes, intimidation, and fraud to force native Americans off their land.

One of the worst atrocities committed is now known as the Trail of Tears, in 1836, in which more than 60,000 people were forcibly removed and ethnically cleansed by the U.S. government. The people suffered from starvation, disease, abuse, and exposure. Thousands of people died and most arrived with nothing. It is now agreed that this was a genocide of the Native Americans.

By the end of this policy, President Jackson had removed almost all the Native people East of the Mississippi, “negotiated” around 70 treaties, and killed thousands of people.

Additionally, President Jackson used federal troops to crush Nat Turner’s slave rebellion and condemned anti-slavery advocates as “monsters”, called for them to be killed, and prohibited their material from being circulated to the people.

Jackson was so unpopular during his time that he was physically assaulted in public and was the target of an assassination attempt. His seizure of power led him to be depicted often as “King Andrew the First”.

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