How Did the U.S. End Up Nearly $40 Trillion in Debt?
Photo by Alice Pasqual on Unsplash
The U.S. national debt didn’t explode overnight.
It grew in three major waves, each the result of choices.
Today I want to walk through those waves in plain English: what the “national debt” actually is, how we went from under $1 trillion to almost $40 trillion, and why this pattern should feel uncomfortably familiar to anyone who studies the rise and fall of empires.
Debt 101: What We’re Even Talking About
Quick definitions:
Deficit: what we add in a single year when the government spends more than it takes in.
Debt: the running total of all those past deficits, minus any small surpluses here and there.
Think of it like this: the deficit is this year’s credit‑card balance; the debt is the lifetime total you still owe.
A few anchor points so the scale hits:
Around 1980, the national debt was under $1 trillion.
By 2000, it was about $5.7 trillion.
By 2010, it had jumped to roughly $13.5 trillion.
By the mid‑2020s, it’s pushing $40 trillion.
Same country. Same flag. Very different balance sheet.
So what happened?
Wave 1: The 1980s–Early 1990s
From under $1T to about $4T
The first big surge was the late Cold War era.
We entered the 1980s with debt under $1 trillion. Over the next decade‑plus, it roughly quadrupled. The main ingredients:
Large tax cuts: Federal revenue as a share of the economy fell. The bet was that faster growth would make up for it.
Higher defense spending: Military budgets increased sharply as the U.S. tried to outspend the Soviet Union.
High interest rates: We were still paying a lot just to service the existing debt.
Politically, this era felt like “morning in America.” Economically, it was “morning in America on a credit card.”
The 1990s did see some belt‑tightening: tax increases, slower spending growth, and a booming tech economy. Debt growth paused a bit as a share of GDP. But we never actually paid off the credit card; we just stopped running it up as fast for a while.
Wave 2: The 2000s–Early 2010s
From $5.7T to $13.5T in a decade
The second wave hit around the time of the Great Recession.
We started 2000 with about $5.7 trillion in debt. By 2010, that number was roughly $13.5 trillion. In other words, it more than doubled in ten years.
What drove that?
New tax cuts in the early 2000s that reduced revenue again.
Wars and security spending after 9/11, much of it financed with borrowing. ( We essentially funded two wars on credit.)
The 2008 financial crisis and Great Recession:
Bank bailouts and emergency programs.
Stimulus spending to keep the economy from falling off a cliff.
A collapse in tax revenue when millions lost jobs and businesses failed.
You can argue about which pieces were necessary or wasteful, but the math is simple: lower revenue + higher spending + a deep recession = much bigger annual deficits.
And those deficits didn’t disappear when the recession ended. They just became the new normal.
Wave 3: The 2020s
From ~$23T in 2019 to almost $40T today
The third wave is the one we’re living through right now.
Right before COVID hit, federal debt was around $23 trillion. A few years and several emergency bills later, we’re closing in on $40 trillion. That means we added more debt in six years than existed in total in 2010.
This wave has a different feel, but the same basic story:
Massive COVID‑19 relief: stimulus checks, expanded unemployment, PPP loans, aid to states, and more. Some of that arguably kept the economy from total collapse; all of it went on the tab.
Earlier tax cuts still in effect: the 2017 tax law reduced corporate tax rates and other liabilities, which meant less revenue coming in just as we were cranking up spending.
Skyrocketing interest costs: now that rates have risen, we’re paying much more just to service the mountain of debt we already have. Interest is becoming one of the fastest‑growing line items in the federal budget.
In plain language: we’re borrowing huge amounts even in what’s supposed to be “peacetime,” and more and more of what we spend is just interest on the past.
The Empire Pattern: Why This Feels Familiar
If you’re a history nerd (hi, same), this arc starts to ring some old bells.
Over and over, you see great powers drifting into the same pattern:
Military overreach: long wars, far‑flung commitments, bases everywhere.
Reckless or sustained overspending: governments promising more than the tax base can support.
Currency debasement or money‑printing: in ancient times, shaving silver off coins; today, ultra‑loose monetary policy or leaning on reserve‑currency status.
Inflation and rising inequality: everyday people feel squeezed; elites seem insulated.
Political denial: leaders insisting “this time is different” until it very much isn’t.
Rome in its later centuries.
Imperial Spain after its silver bonanza.
Britain after two world wars and the loss of its global empire.
The details differ, but the vibes are uncomfortably similar: big military, big promises, bigger bills, and a currency system everyone assumes will stay on top forever.
I’m not saying the United States collapses tomorrow. History doesn’t repeat on a schedule. But we are running a version of an experiment that other empires have already failed.
Where the Money Actually Goes
When people hear “nearly $40 trillion in debt,” they picture a single giant check written to something they hate: “foreign aid,” “welfare,” “the military,” “billionaires,” whatever.
In reality, the big buckets of federal spending today are:
Defense and other security spending (i.e., the Military)
Interest on the existing debt (starting to become a larger item than our military)
Social Security
Medicare and Medicaid
There are plenty of smaller programs worth debating, but you don’t get to these numbers without looking squarely at those four. If we’re serious about the long‑term path, that’s where the conversation has to be.
So What Now? (Besides Panic‑Posting on Social Media)
I’m not writing this to tell you “we’re doomed” or to sell you gold, crypto, or canned beans.
I’m writing it because this is our balance sheet, built up by decades of bipartisan decisions that didn’t add up, and we should at least be honest about how we got here.
A few practical takeaways:
Pay attention to the boring stuff. Budget votes, debt‑ceiling fights, CBO projections, this is where the future gets written, quietly.
Be skeptical of easy answers. Anyone claiming we can fix this with “just cut waste” or “just tax the rich” or “just grow the economy” is skipping over the scale of the problem. While all of those can help, they aren’t the end-all, be-all solutions.
Think in decades, not news cycles. It took 40+ years and three waves to build this mountain. It will take sustained, probably uncomfortable choices to stabilize it.
For me, this whole deep dive started because my dad sent me a link to the Treasury’s historical debt data and said, “National debt…and how did it get this way? Let’s talk about it.” That’s the kind of conversation we should be having more often.
If you’ve read this far, you’re already ahead of most of the political class.
What I’m Doing Next
This piece is the written version of a conversation I’m turning into a podcast episode, where I’ll go deeper into each wave and talk about how past empires handled (or failed to handle) moments like this.
If you want more plain‑English breakdowns of big, uncomfortable numbers, you can:
Subscribe here on Substack so you don’t miss the next part of this series.
Share this with someone who posts about the debt but hasn’t looked at the actual data.
Send me your questions, especially the kind your dad or your friends are asking. Those are often the best starting points.
Three waves. Nearly $40 trillion.
The question now is whether we learn from history or assume, as every empire before us has, that this time is different.