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?
A bag of debt weighed against the globe.
Nobody knows what will happen in the future. The debate around the risk that public debt carries with it continues today. In early 2026, the U.S. national debt reached a staggering $38.9 trillion, fueled by rising interest costs and mandatory spending. It is safe to say that we will never know the true negative impact of such massive amounts of debt until something catastrophic happens.
Why Is National Debt Important?
A politician with no money.
Government debt has been a powerful tool in state building and country formation. However, when debt held by the public surpasses 100% of the GDP—a milestone the U.S. officially crossed in 2026—it limits the government’s ability to respond to future crises.
The higher government debt grows, the higher interest rates typically rise, which “crowds out” private investment. With the average interest rate on marketable debt now exceeding 3.3%, the federal government spends more on interest payments than on many vital domestic programs.
When was the United States Debt-Free?
A bill past due.
President Andrew Jackson was inaugurated in 1829 and began a campaign to eliminate the national bank. In his efforts to undermine it, he moved federal funds to state “pet banks.” These banks invested heavily in land speculation, which temporarily flooded the treasury with cash.
By 1835, Jackson successfully paid off the national debt. However, this achievement was short-lived. To curb the rampant speculation he had inadvertently sparked, Jackson issued the Specie Circular (1836), which required land to be purchased only with gold or silver. This drained hard currency from the East, paralyzed credit, and triggered the Panic of 1837. The resulting depression forced the government to begin borrowing again almost immediately.
History of United States Debt
Becoming debt-free is more difficult than ever.
Since the 1830s, the national debt has spiked primarily during wartime and economic collapses. It reached $2.7 billion after the Civil War and $251 billion (112% of GDP) by the end of World War II in 1945.
While the debt-to-GDP ratio fell to 33% during the Clinton administration, it has spiraled since. Tax cuts, Middle East conflicts, the 2008 financial crisis, and the COVID-19 pandemic have led to the current levels. As of May 2026, the gross national debt sits at approximately $38.91 trillion.
Background on Andrew Jackson
A statue of President Andrew Jackson.
Jackson’s legacy remains deeply polarizing. While he was the only president to zero out the debt, his methods—including the forced removal of Native Americans—have led to a movement to remove him from the $20 bill.
The initiative to replace Jackson with Harriet Tubman was resumed by the Biden administration in 2021. However, due to the complex security redesigns required for modern currency, the Treasury Department does not expect the Tubman $20 bill to enter circulation until approximately 2030. This follows the scheduled redesign of the $10 bill in 2026 and the $5 bill in 2028.
His seizure of power and the “Trail of Tears” genocide remain the primary reasons for his declining popularity. By the end of his policy, Jackson had removed nearly all Native people east of the Mississippi, resulting in thousands of deaths and a legacy that many believe does not belong on the nation’s currency.
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