The Truth About the National Debt: Five Myths and One Reality [Hardcover]

Frances X. Cavanaugh (Author)

Book Description

Publication Date: September 1, 1996

As the election-year rhetoric on balancing the federal budget heats up, this contrarian book-written by a long-time Washington insider-will lead the debate. Drawing on more than 30 years of experience in the government, the author shatters five long-held myths and upholds one reality about what is now a $5 thrillion national debt-essentially revealing that the public debt is not all bad news, but that spending control should be an imperative for the leaders of tomorrow. Arguing that political leaders from both the left and the right use scare tactics to prey on our fears about the national debt, the author maintains that the problem is undisiplined government expenditures, not the way of paying for them-whether through increasing the debt or raising taxes. He proposes a redefinition of the federal deficit to restore discipline and confidence in the management of the government's finances. He also explains the effects of the debt on future generations, private investment, interest rates, social security, and foreign investment, and renews the call for a balanced federal budget.

Editorial Reviews

From Library Journal

Five Trillion Dollars. The numbers click away relentlessly on the famous Debt Clock near Times Square, and the voices proclaiming the ruinous consequences of the federal deficit are becoming louder. In Revolution X (Penguin, 1994), Rob Nelson and Jon Cowan outlined doomsday scenarios of the fiscal and civil collapse that the young will inherit; in 1993, they even organized a picket of the American Association of Retired Persons. Cavanaugh, a public finance consultant and Treasury Department executive, responds with a book attacking what he considers the "scare tactics" and misguided fears about the federal debt. He addresses such commonly perceived dangers as debt burden to future generations, unsustainable interest, and dependence on foreign investors. "We have the strongest economy in the world," he writes. "The prophets of doom and gloom...were (and are) dead wrong." He states several times that government cannot be viewed in the same way as a business or individual family by virtue of its ability to create money through taxes, offering somewhat oblique comfort. His position with a federal agency for retirement makes the book an easy target for opponents who could claim such arguments are exactly what would be expected from World War II-generation Washington insider. A worthwhile addition to public and Academic libraries.?Ben O'Sickey, "Library Journal"
Copyright 1996 Reed Business Information, Inc.

From Booklist

Cavanaugh worked in the U.S. Department of the Treasury for more than 30 years and was the first U.S. "pensions czar," overseeing the federal employee pension trust fund as the inaugural head of the Federal Retirement Thrift Investment Board. Given the current election-year political posturing with regard to this country's budget deficit, Cavanaugh provides a clearheaded dissent in the sometimes emotional and confusing debate over the national debt. He contrasts public and private debt and attempts to challenge five persistent "myths of debt and deficits." Our public debt, he argues, does not burden future generations, "crowd out" private investment, create an unsustainable burden of interest payments, cause us to pay interest to wealthy investors with tax money collected from those with average income, or make us too dependent on foreign investment. Cavanaugh's "one reality" holds that the debt in and of itself is not bad; out-of-control spending is. David Rouse

See all Editorial Reviews

Product Details

• Hardcover: 172 pages
• Publisher: Harvard Business Press (September 1, 1996)
• Language: English
• ISBN-10: 087584734X
• ISBN-13: 978-0875847344
• Product Dimensions: 9.5 x 6.4 x 0.8 inches
• Shipping Weight: 15.2 ounces
• Average Customer Review: 4.3 out of 5 stars  See all reviews (3 customer reviews)
• Amazon Best Sellers Rank: #1,236,174 in Books (See Top 100 in Books)

More About the Author

Discover books, learn about writers, read author blogs, and more.

Customer Reviews

Most Helpful Customer Reviews

1 of 1 people found the following review helpful:

4.0 out of 5 stars A must read, July 11, 2006

By 

B. Mower (Salt Lake City, UT) - See all my reviews
(REAL NAME)   

This review is from: The Truth About the National Debt: Five Myths and One Reality (Hardcover)

This is a must read for anyone who wants to know about the national debt and its significance, or as you will find out in the book, its lack thereof.

The only point I disagree with is his argument of the insignificance of foreign debt. I feel this is still a major issue. Also, he tries to go into other aspects of government funding that are problematic, but I found it very difficult to understand.

4.0 out of 5 stars Too bad he didn't write his other book., July 7, 2011

By 

W. Curtin (DC) - See all my reviews
(REAL NAME)   

This review is from: The Truth About the National Debt: Five Myths and One Reality (Hardcover)

This man was at the center of Treasury financing policy and technique for many years, particularly during the late 60s and early 70s when Treasury borrowing methods changed toward their present form: note and bonds being auctioned rather than offered for subscription, yield auctions, book-entry over paper, etc. He is probably (and maybe the only) person who could write a definitive history of post WWII US financing history - something which is really lacking. Not to mention he could tell debt ceiling stories to curl your toes.

5.0 out of 5 stars A good book about the national debt, October 15, 2007

By 

Patrick Wunderlich (Murray, UT United States) - See all my reviews
(REAL NAME)   

Amazon Verified Purchase

This review is from: The Truth About the National Debt: Five Myths and One Reality (Hardcover)

"This book provides a nice overview about public finance and what the national debt actually is. I found Mr. Cavanaugh's book to be very interesting and insightful. Today, the national debt is constantly talked about in the news and by politicians and policy analysts. Before you vote or agree to any specific policy, please read this book and understand how public finance actually works and what the national debt is and what it is not."