How did Andrew Jackson get the nation to be debt free?

He was the first and only president to have the nation completely out of debt. How long did it last? How did he do it?

How did Andrew Jackson get the nation to be debt free?
In 1835, Jackson managed to reduce the federal debt to only $33,733.05, the lowest it has been since the first fiscal year of 1791. However, this accomplishment was short lived, and a severe depression from 1837 to 1844 caused a ten-fold increase in national debt within its first year.





Purported causes include the economic policies of President Andrew Jackson who created the Specie Circular by executive order and also refused to renew the charter of Second Bank of the United States, resulting in the withdrawal of government funds from that bank. Martin Van Buren, who became president in March 1837, five weeks before the Panic engulfed the young republic's economy, was blamed for the Panic. His refusal to involve the Government in the economy was said by some to have contributed to the damages and duration of the Panic. Of course, the initial Government intervention in the market had inadvertently been part of the cause of the problem, and further intervention might or might not have been useful. Jacksonian Democrats blamed bank irresponsibility, both in funding rampant speculation and by introducing paper money inflation. This was caused by banks issuing excessive paper money (unbacked by bullion reserves), leading to inflation.





When analyzing the suggested causes of the bubble preceding the Panic of 1837, empirical evidence would actually imply the opposite. Suggesting that banks were carelessly lending and creating a credit boom would imply a large drop in reserve rates. During the early 1830s the average reserve rates of banks were not decreasing, but remained relatively stable. During this time, the money supply was increasing (approx. 200%) despite the stable reserve rates of banks. This increase in the supply of money did not come from within the United States, but resulted from a positive specie inflow from foreign investors. British investors found it increasingly attractive to lend to the state governments in the United States in the 1830s. This increased level of available credit allowed the states to fund the building of canals through the use of state-issued bonds (e.g. Erie Canal).