What happened to the national debt during Reagan's first term? Responses It decreased to 19% of GDP due to "Trickle Down" economics. It decreased to 19% of GDP due to "Trickle Down" economics. Reagan effectively abolished the national debt through his extreme economic policies. Reagan effectively abolished the national debt through his extreme economic policies. It stayed stable at 47% of GDP due to Supply-Side Economics. It stayed stable at 47% of GDP due to Supply-Side Economics. It increased to 53% of GDP due to lower taxes and higher defense budgets