Why is January 8th an important date in American history? This day in 1835 is the only day in our history when we have not been in debt.
U.S. Sen. George LeMieux, R-Fla., has joined the ranks of politicians experimenting with Twitter. LeMieux, who was appointed last year to fill the unexpired term of Sen. Mel Martinez, has sent Twitter messages with his thoughts on health care reform ("neither 'comprehensive' nor 'reform'"), his whereabouts ("visiting our military installations tomorrow") and now, U.S. trivia. "Why is January 8th an important date in American History," LeMieux asked during the afternoon of Jan. 8, 2010. "This day in 1835 is the only day in our history when we have not been in debt." We've all seen pictures of the national debt clock, which is now spinning past $12.3 trillion. In fact, LeMieux has it running on a computer monitor posted outside his Washington office, and mentioned the debt on his first day as a senator. We wondered, was there actually a time, one time, when the clock struck zero? First, just so no one gets confused: Debt does not equal deficit. Deficit is the difference in the money the government takes in and what it spends each year. Debt is accumulated deficits, plus interest. You'd think the United States would have been founded with zero debt. But not so, says the Bureau of Public Debt. The government office, which is under the U.S. Department of the Treasury, says the United States had more than $75 million in outstanding American Revolutionary War debts when the nation was created. From there, the national debt grew some and shrunk some before ballooning to $127 million as a result of the War of 1812. The debt then started a steady 20-year decline, which you can see for yourself here. By Jan. 1, 1833, the national debt stood at $7 million. On Jan. 1, 1835, under President Andrew Jackson, the debt was just $33,733. On Jan. 8 of that year, Jackson proclaimed that the last installment of the national debt had been paid. Jackson had called the debt a "national curse" when he ran for president in 1824. "The Payment of the Public Debt," Jackson wrote in a toast at a party that also marked the anniversary of the Battle of New Orleans (another good day for Jackson, who as general, led U.S. troops to victory). "Let us commemorate it as an event that gives us increased power as a nation, and reflects luster on our federal Union, of whose justice, fidelity, and wisdom it is a glorious illustration." According to the 1860 biography Life of Andrew Jackson written by James Parton, Jackson vetoed bills that appropriated money for infrastructure projects, thus quickening the pace that the country's debt was retired by up to five years. It was one of the cornerstones of his administration, said Parton, who added that Jackson thought it his most glorious achievement. But did it actually happen on Jan. 8? Jackson biographer Robert Vincent Remini said in his book The Life of Andrew Jackson that the extinguishing of the national debt "nearly coincided" with the anniversary of the Battle of New Orleans, which falls on Jan. 8. That would at least suggest the actual payment may have occurred a few days sooner. Remini doesn't get into more detail. Other accounts, like H.W. Brand's Andrew Jackson, His Life and Times, say the country was debt free closer to Jan. 1, 1835. For its part, the Bureau of Public Debt says that the national debt reached zero on Jan. 8, 1835, a Thursday. LeMieux's office provided PolitiFact with some additional examples (here and here) documenting the U.S. being debt free on Jan. 8, 1835. After Jan. 8, history writers fail to track the debt with precise detail. Jackson biographers Parton and Remini don't discuss how long the national debt remained zero. (In their defense, they use their ink discussing an assassination attempt on Jackson at the end of January 1835). The Bureau of Public Debt also appears fuzzy on how long America was debt free. All the government group notes is that it wasn't long. We talked to Robert E. Wright, a political economy professor and author of One Nation Under Debt: Hamilton, Jefferson, and the History of What We Owe. He offered a couple of caveats to this talk about the national debt. Even though the United States was considered debt free, the government still had outstanding loans, Wright said. No one asked for the loans to be paid off however, and the federal government had the money in the bank to pay them if they were. Wright said the country remained debt free for some time -- much longer than a day -- as politicians argued over what to do with government surpluses. "There wasn't a desire to invest in corporations," Wright said. "But there were schemes afloat to divide the money up and give it to the states." Financial panics made those discussions irrelevant. By Jan. 1, 1836, the national debt had grown back to $37,000, according to the Bureau of Public Debt. A four-year depression starting in 1839 resulted in the debt growing to $20 million. Then, it was off to the races. The debt was more than $2.6 billion by the end of the Civil War; almost $27 billion by the end of World War I, and almost $260 billion by the end of World War II. The debt reached $1 trillion in Ronald Reagan's first term as president. It reached $5 trillion near the end of Bill Clinton's first term. LeMieux says that the United States was only debt free for one day in its history -- Jan. 8, 1835. He's right that the United States was indeed debt free on that day. And before and after that, we as a country really never got that close to being debt free. Did it last only one day, however, as LeMieux says? We found "this day in history" stories and blogs that tend to suggest so. But LeMieux's office didn't offer any definitive proof. Jackson biographers don't note it that way. Neither does the government office that tracks the debt. Scholars also say it lasted much more than a day. And since Jackson was bent on retiring the debt, we'd at least expect him to spend a day or two with an empty credit card account before racking up a bill again. We rate LeMieux's comment Mostly True.
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