George H. Blackford, Ph.D.

 Economist at Large

 Email: george(at)


It ain't what you don't know that gets you into trouble.

Itís what you know for sure that just ain't so.
Attributed to Mark Twain (among others)


Economic Papers
Political Essays

Understanding The Federal Budget

Chapter 1: History of the National Debt*

Chapter 1: History of the National Debt begins with an explanation of the relationship between federal expenditures, revenues, deficits, and the national debt and why it is important to view these entities relative to the size of the economy. Particular attention is paid to definitions and concepts that are needed to understand these relationships.

The history of the national debt from 1929 to the present is then examined in this chapter. It is shown that the primary sources of this debt are 1) increases in defense expenditures associated with war, 2) economic downturns associated with recessions and depressions, and 3) cutting taxes in response to increasing government expenditures.

The appendix at the end of this chapter gives a brief explanation of some the ways we measure aggregate economic variables (such as total output, the average price level, and productivity) and why these aggregate measures are important to an understanding of the federal budget.

See: Understanding The Federal Budget: (2013) (2014) at or click here for a preview.

*This chapter was formally Chapter 11 in Where Did All The Money Go?