First off, in order to determine and understand the national debt you need to know a little bit about the history. National debt is the total of all the obligations of the treasury to pay money to the federal governments creators. National debt was created in 1791, and it was about $75 million. For America nearly two centuries later it was $2,600.8 billion, which is a tremendous increase. National debt was created during the nation's war for independence, in particular the Battle of Bunker Hill in 1775. Continental Congress issued $2 million of bills of credit called Continentals to help finance for the war. Towards the end of the war, Continentals increased to an outrageous $241.6 million. This created huge inflation, which resulted in the bills becoming worth merely nothing. The new debt of the United States overall resulted to a $27 million.

Secondly, a few benefits resulted from the national debt increasing. First was the Louisiana Purchase which added $11.25 million to the debt. Many of the wars dramatically increased the Nations debt, but it was necessity in order to win. For example in the war of 1812 the national debt nearly tripled, and in the Mexican war it nearly quadrupled. Also in World war one and two, the debt increased almost six fold between the years of 1939 and 1946. Also, many presidents such as Reagan had tax cuts, and increased defense spending which created large deficits. On the contrary, the government tried to reduce the debt in many ways. After the Civil War, the government ran a budget surplus every year and cut the debt to about one third of its original value. The last true debt reduction happened during the 1920's when America was able to reduce the debt to almost two thirds.