FIGURE 19-1: The Ratio of Government Debt to GDP Since 1791 The U.S. federal government debt held by the public, relative to the size of the U.S. economy, rises sharply during wars, when the government finances wartime spending by borrowing. It also increases during major economic downturns, such as the Great Depression of the 1930s and the Great Recession following the financial crisis of 2008–2009. The debt–GDP ratio usually declines gradually during periods of peace and prosperity.

Data from: U.S. Department of the Treasury, U.S. Department of Commerce, and T. S. Berry, “Production and Population Since 1789,” Bostwick Paper No. 6, Richmond, 1988.