Reagan was not the first President to increase the national debt — in fact, the nation’s first debts were incurred during the Revolutionary War. Nor did his Presidency see the largest increases — while the debt increased by 160% during his two terms in office, it increased as a greater rate during World War II. However, the recent history of the national debt is intimately tied to Reagan. Fueled by tax cuts and a large defense build-up, the debt grew to record-setting levels during his tenure, and his administration saw the beginning of the current, relaxed attitude towards large deficits.
By the end of Reagan’s second term, the national debt had reached $2.6 trillion. Perhaps the best way to consider the size of the national debt, however, is in terms of national gross national product — comparing the size of the debt to the size of the economy. Under Reagan, the debt reached 53% of GNP, its highest level since WWII.
Perhaps the most important aspect of Reagan’s treatment of the debt was simply the example it created. The Reagan years fostered the idea that deficits don’t matter, ensuring that his legacy of debt would continue to grow. Perhaps George Will put it best in his 1989 retrospective about the Reagan years:
“…something fundamental happened in American governance when a conservative Republican administration produced deficits of $200 billion — and nothing happened. Nothing, that is, dramatic and immediately visible. …for the political class, the event was a splendid liberation: all the rules were repealed.”