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America’s Fiscal Constitution

Book Description

America's Fiscal Constitution: Its Triumph and Collapse (PublicAffairs, April 1, 2014) tells the remarkable story of federal leaders who imposed clear limits on the use of federal debt. For almost two centuries those limits allowed the federal government to borrow for only four purposes. That traditional fiscal constitution collapsed in 2001, when federal elected officials broke the traditional link between federal tax and spending policies. For the first time in history, the federal government cut taxes during war, funded permanent new programs entirely with debt, and became dependent on foreign creditors.

With insights gained from original scholarship and an unusual breadth of experience in finance and government, Bill White distills practical lessons from the nation's five previous spikes in debt. America's Fiscal Constitution is an entertaining and objective guide for people trying to make sense of the current and most dangerous debt crisis.

Table of Contents

  1. Cover
  2. Title Page
  3. Copyright
  4. Dedication
  5. Contents
  6. Author’s Note
  7. 1. The American Fiscal Tradition
  8. PART I | A NEW NATION AND DEMOCRATIC PARTY LIMIT FEDERAL DEBT: 1789–1853
    1. 2. Debt Gives Rise to a New Nation and Political Party
    2. 3. Jefferson’s Party Defines the Limits on Debt
    3. 4. A Revived Democratic Party Pays Off the Debt
  9. PART II | THE TRADITION SUSTAINS A GROWING NATION AND THE REPUBLICAN PARTY: 1854–1900
    1. 5. Republicans Embrace the Tradition
    2. 6. Borrowing and Taxing to Restore the Union
    3. 7. Shrinking Debt and Drifting Parties
  10. PART III | PROGRESSIVE REFORMERS EMBRACE THE TRADITION: 1901–1940
    1. 8. Reformers Redefine the Parties and Government
    2. 9. Financing a World War and Paying Down Debt
    3. 10. Debt During the Great Depression
  11. PART IV | CONTAINING THE BURDEN OF WORLD WAR II DEBT WHILE INCREASING COMMITMENTS: 1941–1976
    1. 11. War and Taxes
    2. 12. Containing Debt While Funding Defense, Pensions, and Highways
    3. 13. Medical Needs, War, and Recession
  12. PART V | THE EROSION, REVIVAL, AND COLLAPSE OF THE TRADITION: 1977–2013
    1. 14. Structural Deficit: Pressures for Tax Cuts and a Revived Cold War
    2. 15. The Tradition Survives, Though Its Pillars Erode
    3. 16. Traditionalists Battle Back
    4. 17. The Tradition Collapses
    5. 18. The Great Recession and Budget Stalemate
  13. PART VI | RESTORING THE TRADITION
    1. 19. Reviving Traditional Budget Practices
    2. 20. Balancing the National Security Budget
    3. 21. Paying for Medical Care
    4. 22. Growth, Taxes, and the Federal Reserve
    5. 23. Reforming the Political Parties
  14. Acknowledgments
  15. Notes
  16. Bibliography
  17. Appendices
    1. A. US Treasury Debt, 1790–2013
    2. B. Unmonetized Debt Compared to National Income and Tax Revenues, 1790–2012
    3. C. Federal Funds Revenues, Outlays, and Surplus/Deficit, 1789–2013
    4. D. Foreign Holdings of US Debt, 1976–2011
    5. E. US State and Local Debt, 1970–2009
    6. F. Trade Balances, 1790–2010
    7. G. Corporate Income Tax: Effective Rates and Share of National Income, 1960–2009
    8. H. Personal Income Tax: Effective Rates and Share of National Income, 1950–2010
  18. Index