From 1929 to 2009, us government debt grew from thousand us$ (constant 2005=100) 1.3 to 35.3, at an annual average growth rate of 4.2%, while personal income per capita grew from thousand 6.6 to 35.8, at an average annual rate of 2.1%.  During the 1929-1933 as well as the 2008-2009 crises, debt went up, while income went down. The rest of the time, both debt and income went both up, although at varying speeds. In 2009, us debt attained 10,849 and personal income 10,997  billion constant us$.

In real dollars, the US national debt became about the size of all personal incomes earned by the US population in 2009. In other words, the average US citizen carries, on behalf of the government, a debt of US$35.3 thousand (red line) comparable to the US$35.8 thousand of the average annual earnings (blue line).

Since 1929, national debt and personal income show a strong correlation (mostly well above 0.5), exception made of the great depression of the 1930s (1929-1933), marked by a negative correlation (-0.7 to -0.9) of rising debt and falling income. National debt may be considered a historical marker:

  1. 1929 crisis: widespread unemployment and business demise caused personal incomes to go down, and national debt to grow in support of social assistance and public investment.
  2. World War II 1944-1950: incomes bounced back, but debt increased to high peaks, attaining 150% of income (both in per capita terms -- blue dotted line, scale on the right-hand Y-axis), due to the war effort.
  3. 1951-1980: in spite of both Korean (1950-1953) and Vietnam wars (1954-1975), an economic bonanza and budget control kept debt on check, the latter plunging to the lows 40% of income.
  4. 1981-1995, inauguration of the "Reaganomics" era: during the mandates of Reagan (1981-1989) and George H. Bush (1989-1993) debt started to run much faster than income, rising to 80% of the latter.
  5. 1995-2001: adopting a "balanced budget" approach, Clinton (1993-2001) succeeded in containing debt (falling from 80% to 65% of income), while at the same time planting the seeds that would feed the forthcoming 2008 financial crisis.
  6. After 2001: George W. Bush (2001-2009) removed the lids, let debt climb without checks, and gladly indulged in expensive war operations in Iraq and Afghanistan.
  7. 2008 crisis: looks like an "encore" of the 1929 crash. Between 2007 and 2009, debt grew by 28%, income went down by 2% -- another negative correlation.

Is this cause for concern?

 

US National Debt & US Personal Income per capita
(1920-2009)

Year

Population

US National Debt

US Personal Income

Debt as % of personal income
(per capita)

current US$ (billion) constant US$ (2005=100) (billion) Per capita % annual change
(of per capita)
current US$ (billion) constant US$ (2005=100) (billion) Per capita
2009307,006,55011,91010,84935.316.4%12,07210,99735.898.7%
2008304,374,84610,0259,24130.48.0%12,23911,28237.181.9%
2007301,579,8959,0088,48128.11.9%11,89411,19837.175.7%
2006298,593,2128,5078,23927.62.9%11,26810,91336.575.5%
2005295,753,1517,9337,93326.83.1%10,48610,48635.575.7%
2004293,045,7397,3797,62526.04.8%9,93710,26935.074.3%
2003290,326,4186,7837,20924.85.7%9,3789,96634.372.3%
2002287,803,9146,2286,76123.54.5%9,0609,83534.268.7%
2001285,081,5565,8076,40622.5-0.9%8,8839,80034.465.4%
2000282,171,9575,6746,40122.7-5.1%8,5599,65634.266.3%
1999272,690,8135,6566,51923.90.0%7,9119,11733.471.5%
1998270,248,0035,5266,46323.90.0%7,5258,80132.673.4%
1997267,783,6075,4136,40223.90.8%7,0018,27930.977.3%
1996265,228,5725,2256,28823.72.1%6,5927,93329.979.3%
1995262,803,2764,9746,10023.22.9%6,2017,60528.980.2%
1994260,327,0214,6935,87522.63.2%5,8757,35528.379.9%
1993257,782,6084,4115,64021.95.1%5,5687,11827.679.2%
1992255,029,6994,0655,31120.87.1%5,3476,98727.476.0%
1991252,153,0923,6654,90319.48.3%5,0326,73026.772.8%
1990249,464,3963,2334,47818.07.8%4,8476,71326.966.7%
1989246,819,2302,8574,11016.74.8%4,5586,55626.662.7%
1988244,498,9822,6023,88515.96.1%4,2316,31625.861.5%
1987242,288,9182,3503,62915.06.5%3,9246,06025.059.9%
1986240,132,8872,1253,37714.113.0%3,6965,87324.557.5%
1985237,923,7951,8232,96112.411.6%3,4975,67923.952.1%
1984235,824,9021,5722,63111.29.1%3,2695,46923.248.1%
1983233,791,9941,3772,39110.215.0%2,9525,12521.946.7%
1982231,664,4581,1422,0618.96.8%2,7674,99321.641.3%
1981229,465,7149981,9118.3-0.5%2,5824,94521.538.6%
1980227,224,6819081,9018.4-0.3%2,3024,82021.239.4%
1979225,055,4878271,8898.4-2.2%2,0604,70620.940.1%
1978222,584,5457721,9108.62.1%1,8374,54620.442.0%
1977220,239,4256991,8518.44.8%1,6334,32419.642.8%
1976218,035,1646201,7488.09.0%1,4754,15519.142.1%
1975215,973,1995331,5897.41.5%1,3353,97718.439.9%
1974213,853,9284751,5497.2-5.8%1,2233,98718.638.9%
1973211,908,7884581,6307.70.6%1,1113,95018.641.3%
1972209,896,0214271,6047.61.8%9933,72717.843.0%
1971207,660,6773981,5597.50.9%9033,53717.044.1%
1970205,052,1743711,5257.4-1.5%8393,44916.844.2%
1969202,676,9463541,5317.6-4.0%7783,36916.645.4%
1968200,706,0523481,5797.91.2%7123,23316.148.8%
1967198,712,0563261,5457.8-2.1%6483,06915.450.3%
1966196,560,3383201,5627.9-3.1%6042,94815.053.0%
1965194,302,9633171,5938.2-1.3%5562,78914.457.1%
1964191,888,7913121,5938.3-1.0%5142,62913.760.6%
1963189,241,7983061,5888.40.0%4802,48913.263.8%
1962186,537,7372981,5648.40.2%4562,39412.865.3%
1961183,691,4812891,5378.4-1.8%4292,28012.467.4%
1960180,671,1582861,5408.5-2.4%4112,21212.269.6%
1959177,829,6282851,5528.70.1%3922,13912.072.6%
1958174,881,9042761,5258.7-1.7%3692,03511.674.9%
1957171,984,1302711,5268.9-5.7%3592,02211.875.5%
1956168,903,0312731,5909.4-5.6%3401,97911.780.3%
1955165,931,2022741,65410.0-2.3%3161,90511.586.8%
1954163,025,8542711,66310.2-0.7%2941,80511.192.2%
1953160,184,1922661,64610.3-0.2%2921,80511.391.2%
1952157,552,7402591,62310.3-1.9%2751,72310.994.2%
1951154,877,8892551,62610.5-9.0%2581,64310.699.0%
1950152,271,4172571,75711.5-1.3%2291,56310.3112.4%
1949149,188,1302531,74511.7-1.3%2071,4299.6122.1%
1948146,631,3022521,73811.9-9.1%2101,4459.9120.3%
1947144,126,0712581,87913.0-15.1%1911,3899.6135.3%
1946141,388,5662692,17315.4-7.9%1791,44010.2150.9%
1945139,928,1652592,33416.724.0%1721,54811.1150.7%
1944138,397,3452011,86113.541.9%1661,53711.1121.1%
1943136,739,3531371,2969.576.6%1521,44210.589.9%
1942134,859,553727245.435.7%1231,2339.158.7%
1941133,402,471495284.05.7%961,0357.851.0%
1940132,122,446434943.74.0%789026.854.8%
1939130,879,718404713.69.0%738496.555.5%
1938129,824,939374283.34.3%687886.154.3%
1937128,824,829364083.22.7%748296.449.2%
1936128,053,180343943.115.7%698016.349.2%
1935127,250,232293392.73.3%607125.647.6%
1934126,373,773273262.613.1%546475.150.4%
1933125,578,763232862.318.1%475944.748.2%
1932124,840,471192411.930.5%506174.939.1%
1931124,039,648171831.514.9%657125.725.8%
1930123,076,741161581.3-1.8%767456.121.3%
1929121,767,000171601.3 858016.619.9%
Annual average change rate1.2%8.5%5.4%4.2% 6.4%3.3%2.1%2.0%

 

Sources: US Treasury, US Bureau of Economic Analysis, and US Census Bureau.

 

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