Going through the turn of the 19th century, America was experiencing the largest economic boom it had ever seen. After recovering from a Recession at the end of the 19th century, America made a very hearty profit on World War I; before joining the Allied Forces, the US was trading with both the Central Powers and Allies.
Moving into the Twenties’, nicknamed the “Roaring Twenties'” for the overall fiscal development of the country during this time. The stock market was played as roulette; this, with a combination of lack of regulation, crashed the stock market of the United States in 1929. This event would forever change American fiscal policy.
Before President Roosevelt and the New Deal took power, and other than a small period where silver was used, the United States could back its currency with gold. The concept of a national debt did not come up until The Great Depression, and President Roosevelt’s attempt to fix the economy. Originally borrowing money from private citizens who were incredibly wealthy (without the help of J.P. Morgan himself, it could be argued the Depression would have been much longer), FDR’s Presidency saw the creation of a National Debt, an idea never before considered.
The United States interference in World War II was probably the largest reason for the recovery of the economy after the Depression, but Roosevelt also implemented other policies that would stick to help ensure economic stability (such as public works programs, and training programs for Veterans).
Since then, fiscal policy has not changed very much in retrospect. Sure tax rates have changed–only to be reversed when the opposite power comes into power. Though the recent collapse of the housing market and the securities industry flirted with a full-blown depression, it was never categorized as such. As after the Great Depression, the economy became increasingly regulated.
There is only one thing, however, that has not changed in American fiscal policy over the last century or so–the amassing of a National Debt, with currency backed only by “the full faith” of America.
McEachern, W. A. (2009). Econ for macroeconomics. (2010-2011 ed.). Mason, OH: South-Western Pub.