In 1838, President Van Buren forcefully cautioned Congress in 1839 against rising debt, insisting that both the United States and the wider world had already shown what happens once a government begins to borrow in peacetime:
“Our own experience and also that of other nations have demonstrated the unavoidable and fearful rapidity with which a public debt is increased when the Government has once surrendered itself to the ruinous practice of supplying its supposed necessities by new loans.”
Debt from War of 1812
The most immediate example was the War of 1812, during which the United States watched its national debt explode in only three years.
- In 1812, the federal debt was roughly $45 million.
- By 1815, it exceeded $119 million, nearly tripling in size.
Even in peacetime that followed, the debt continued to rise before eventually being reduced under Jackson and Van Buren. To Van Buren, this was proof that once borrowing begins, even if temporary, it can quickly become a dangerous wave that can drown a nation.
State's Debt in 1839
A more recent example of dangerous debt was the state debt crisis following the panic of 1837. From 1836 to 1839, several western states launched ambitious internal-improvement programs financed almost entirely through borrowing. Illinois was among the most extreme cases. By 1839, Illinois had accumulated more than forty years’ worth of revenue in debt, a load it could never hope to service. The collapse became unmistakable by 1841. In the words of Governor Thomas Ford:
“No further attempt was made after July, 1841, to pay interest on the public debt. For want of full knowledge of her condition abroad, and of the condition of other new States, in a short time Illinois, and some others in the west, became a stench in the nostrils of the civilized world. The people at home began to wake up in terror; the people abroad who wished to settle in a new country, avoided Illinois as they would pestilence and famine; and there was great danger that the future emigrants would be men who, having no regard for their own characters, would also have none for that of the State where they might live… Every one at home wanted to sell his property and move away, and but few, either at home or abroad, wanted to purchase.”
Illinois became the nation’s most vivid example of how quickly peacetime borrowing, even if justified as temporary, could spiral into a full financial catastrophe.
Prevention, Prudence, and Economy
Confronted with these examples, Van Buren argued that the federal government must not follow the same path as the near bankrupt states. He insisted that preventing permanent debt was essential not just for fiscal stability, but for the health of the republic itself. In his words, “The creation in time of peace of a debt likely to become permanent is an evil for which there is no equivalent.” For Van Buren, the lesson was clear. Debt grows fastest right at the moment when it begins, and once a government relies on loans to meet ordinary needs, the republic’s independence, character, and financial stability all are put at risk.
Here is the full excerpt from President Martin Van Buren’s 1839 State of the Union address on the topic.
“To avoid this and to keep the expenditures within reasonable bounds is a duty second only in importance to the preservation of our national character and the protection of our citizens in their civil and political rights. The creation in time of peace of a debt likely to become permanent is an evil for which there is no equivalent. The rapidity with which many of the States are apparently approaching to this condition admonishes us of our own duties in a manner too impressive to be disregarded. One, not the least important, is to keep the Federal Government always in a condition to discharge with ease and vigor its highest functions should their exercise be required by any sudden conjuncture of public affairs--a condition to which we are always exposed and which may occur when it is least expected. To this end it is indispensable that its finances should be untrammeled and its resources as far as practicable unencumbered. No circumstance could present greater obstacles to the accomplishment of these vitally important objects than the creation of an onerous national debt. Our own experience and also that of other nations have demonstrated the unavoidable and fearful rapidity with which a public debt is increased when the Government has once surrendered itself to the ruinous practice of supplying its supposed necessities by new loans. The struggle, therefore, on our part to be successful must be made at the threshold. To make our efforts effective, severe economy is necessary. This is the surest provision for the national welfare, and it is at the same time the best preservative of the principles on which our institutions rest. Simplicity and economy in the affairs of state have never failed to chasten and invigorate republican principles, while these have been as surely subverted by national prodigality, under whatever specious pretexts it may have been introduced or fostered.”
How does Illinois debt in 1839 compare to today?
To put this into perspective, Illinois in 1839, had a debt of $13 million, an immense amount for a frontier state whose entire annual revenue was just under $300,000 representing more than 40 years of revenue. Yet, this amount pales in comparison to the debt owed by Illinois in 2024. Today, Illinois’ total long-term obligations are close to $225 billion dollars. In 1839, the debt per capita adjusted for inflation would be around $918 per person. In 2024, the Illinois debt was between $16, 000 and $18,000 per person and growing.
References
Martin Van Buren, “Third Annual Message,” December 2, 1839. The American Presidency Project. https://www.presidency.ucsb.edu/documents/third-annual-message-4
Thomas Ford, A History of Illinois from Its Commencement as a State in 1818 to 1847 (1854), quoted in A Brief History of Illinois, pp. 222–223.
Burlingame, Michael. Abraham Lincoln: A Life, Vol. 1. Johns Hopkins University Press, 2008, p. 121.
U.S. Department of the Treasury, Historical Debt Outstanding, 1789–Present.
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