US State Government Debt Since 1900

State government debt began the 20th century at one percent of GDP and remained there until after World War I. In the 1920s it rose briskly to 2 percent of GDP, then peaked at over 5 percent of GDP in the depths of the Great Depression. State government debt fell sharply through World War II bottoming out at one percent of GDP in the late 1940s.

In the 1950s state government debt began growing strongly, tripling to 3.5 percent by 1960. After 1960 growth moderated, and state government debt peaked at 4.5 percent of GDP before declining to 4.3 percent in 1981. In the 1980s debt increased reaching 5.9 percent of GDP by 1992. Debt plateaued in the 1990s and then resumed growth in the 2000s, reaching almost 7.5 percent of GDP by 2009. State government debt has declined significantly in the 2010s.

Federal, State, Local Debt in 20th Century

At the beginning of the 20th century debt was equally divided between federal and state and local debt, totaling less than 20 percent of GDP. After World War I, the total debt surged to 45% of GDP. But by the mid 1920s debt had declined to below 35 percent of GDP. Then came the Great Depression, boosting total public debt to 70 percent of GDP.

World War II boosted federal debt to almost 122 percent of GDP in 1946, with state and local debt adding another 7 percent. For the next 35 years successive governments brought the debt below 50 percent of GDP, but President Reagan increased the federal debt up over 50 percent of GDP, and total debt towards 70 percent to win the Cold War.

President Bush increased the debt to fight a war on terror and bail out the banks in the crisis of 2008. Presidents Trump and Biden increased the debt starting in 2020 to fight the COVID crisis.

State-by-State Comparison of State and Local Debt

The bubble chart shows total state and local debt for each state in dollars per capita compared against the Gross State Product (GSP) in dollars per capita. The chart shows that the overwhelming number of states show a correlation between state and local debt and GSP. Notable outliers are Wyoming and Idaho on the low debt side and New York on the high debt side.

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Debt Data Sources

Debt data is from official government sources.

• Federal debt data since 1962 comes from the president’s budget.
  
• Federal debt for 1940-1961 comes from the president’s budget.
  
• Federal debt for 1914-1939 comes from the US Treasury and St. Louis Fed.
  
• Federal debt before 1914 comes from the US Treasury
  
• All other debt data comes from the US Census Bureau.

Gross Domestic Product data comes from US Bureau of Economic Analysis and measuringworth.com.

Detailed table of debt data sources here.

Federal debt data begins in 1792.

State and local debt data begins in 1820.

State and local debt data for individual states begins in 1957.

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