How The US Federal Debt Has Gone Parabolic

 In 1970 the figure stood at $378 billion of public debt outstanding, which represented 34.9% of GDP. The latter percentage had peaked at about 120% at the end of WWII but had steadily marched downhill during the quarter century thereafter.

Accordingly, since then the public debt has increased by 90X to the aforementioned present level of $34.5 trillion - a gain far higher than the 25X rise of nominal GDP during the last 53 years.

The burden on GDP has returned to peak WWII levels, at 120%. Public Debt Outstanding and % of GDP, 1970 to 2023 But the hoary idea floating around Washington that we lived to tell about it once, so we can do so again, is utter tommyrot.

The greatest government borrowing spree in history until then was accomplished with an actual reduction of the debt burden on the US economy! What happened, of course, was that wartime economic controls caused enormous amounts of private debt to be paid off, leaving immense headroom for absorption of the public debt by private savers.

Specifically, household debt shrunk from 60% of GDP in 1938 to just 20% by 1945, while corporate business debt dropped from about 90% of GDP to 40%. In all private debt vacated a huge space on the national balance sheet, dropping from 150% of GDP in 1938 to only 60% by the end of the war.

That's how the war debt was financed without massive monetization of the public debt.

Growth of Federal Debt During WWII Compared to the WWII savings spree, America's current economy is actually built on the opposite - endless and rising accumulation of debt in all economic sectors.

https://internationalman.com/articles/david-stockman-on-how-the-us-federal-debt-has-gone-parabolic/