Forgive Us Our Debts

Forgive Us Our Debts: The Intergenerational Dangers of Fiscal Irresponsibility

Andrew L. Yarrow
Copyright Date: 2008
Published by: Yale University Press
Pages: 184
  • Cite this Item
  • Book Info
    Forgive Us Our Debts
    Book Description:

    In this immensely timely book, Andrew Yarrow brings the sometimes eye-glazing discussion of national debt down to earth, explaining in accessible terms why federal debt is rising (and will soon rise much faster), what effects it may have on Americans if debt is not brought under control, why our government borrows, and what it will take to pay it all back.

    The picture Yarrow paints should concern all Americans. Specifically, he brings to light how rising Medicare, Social Security, and other spending on one hand, and insufficient government revenues on the other, make a mockery of fiscal responsibility. Deficits and debt, Yarrow asserts, are crowding out spending on needed investments in science, environment, infrastructure, and other domestic discretionary programs and could severely harm our nation's and our citizens' future. But he makes clear that this does not have to be a doomsday scenario. If we act in a bipartisan fashion to restore fiscal health, our legacy to the next generation can be much more than trillions of dollars of IOUs.

    eISBN: 978-0-300-14533-5
    Subjects: Business

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Acknowledgments
    (pp. ix-x)
  4. The View from Washington: Six Democrats and Six Republicans Talk About Debt
    (pp. xi-xiii)
  5. Chapter 1 What Are Deficits and Debt, and Why Are They Growing?
    (pp. 1-27)

    Everyone borrows money at one time or another. As Cole Porter might have put it, mans do it, clans do it, even Central Asian—stans do it; let’s do it: let’s fall in debt! We borrow to buy houses or go to college, for capital investment in new factories or highways, or to wage wars. If going into debt is for useful or necessary purposes that have a longterm payoff, and one expects to be able to pay back one’s debts, borrowing can be beneficial. Responsible people and entities gauge their need and their ability to pay, and over time...

  6. Chapter 2 Balancing and Unbalancing Our Budget: A History of Government Debt in the United States
    (pp. 28-47)

    For most of the nation’s history, other than in wartime, the United States kept its budget more or less balanced. Our Founders, perhaps steeped in a more Puritanical—or commonsensical—outlook on deficits, regularly decried public profligacy. Echoing George Washington’s comments on fiscal responsibility, Thomas Jefferson said: “I place economy among the first and most important republican virtues, and public debt as the greatest of the dangers to be feared.”¹ For the country’s first 139 years, it ran surpluses 93 times, almost onethird of its 46 deficits were to fight wars, and its other deficits were infinitesimal. Americans and their...

  7. Chapter 3 How Deficits Are Funded
    (pp. 48-57)

    Every morning at 11:30 A.M., the Treasury Department publicly announces the size of the national debt that day, based on data from about fifty sources. This number, which rises by an average of about $10,500 per second, is also tracked by various others, from the national debt clock near Times Square in New York, a number of deficithawk members of Congress who have holographic “debt clocks” in their offices, and antideficit advocates such as the Concord Coalition, which produces a cheery debt-clock refrigerator magnet for those who want to check up on the nation’s fiscal fortunes as they reach for...

  8. Chapter 4 How Deficits and Debt Affect America and You
    (pp. 58-69)

    Most Americans today don’t pop sleeping pills worrying about our several hundred billion–dollar budget deficits, $10 trillion debt, and $50 trillion in unfunded liabilities. Yet the fact of the matter is that deficits and debt affect every one of us, particularly in three arenas where they should hit home—the pocketbook, the fortunes of our children, and the broader quality of life in America. Harry Truman famously, and frustratedly, said that he wished he could find a one-armed economist. Economists, like indecisive gamblers, are notorious for observing that “on the one hand,” if x, y, and z happen, then...

  9. Chapter 5 The Potential Dangers of Doing Nothing, or Fiddling While Our Economy Goes Up in Smoke
    (pp. 70-80)

    Herb Stein, the legendary economist and adviser to presidents, once said: “That which cannot go on forever won’t.”¹ In other words, something’s gotta give when it comes to America’s growing national debt. Essentially, there are two options: 1) muddling along for a while, not doing much, and letting the problem get worse, or much, much worse, which is ultimately unsustainable; or 2) thoughtful and courageous reforms that reestablish the nation’s fiscal well-being and position the United States for strength, growth, and better lives for its citizens in the twenty-first century and beyond. While the second option, which—in theory—everyone...

  10. Chapter 6 The Politics of Deficits and Debt
    (pp. 81-92)

    When it comes to squarely confronting our nation’s mounting fiscal problems, the oft-used phrase “political leaders” requires a careful parsing. Politicians across the spectrum for several decades have decried America’s growing debt and looming crisis in the wake of the baby boomers’ retirement (see The View from Washington), but there have been few leaders with the courage and clout actually to lead the nation in addressing the issue.

    While recent history has shown that some successful efforts have been made—from the 1983 Greenspan Commission and the 1986 tax reform to the 1990 Budget Enforcement Act and budget deals of...

  11. Chapter 7 What Can and Should Be Done to Reduce America’s Deficits and Debt?
    (pp. 93-132)

    The national debt and America’s fiscal straits are much like a Rube Goldberg contraption. They are complex to the point of mind-paralyzing absurdity. They are an assemblage of myriad, moving, interacting parts. And they are conducive to neither simple policy fixes nor politically popular solutions.

    However, as the Civil War, World War II, and the Cold War demonstrate, the United States knows how to overcome threats to its national survival. Even if we may be fractious, averse to radical and painful change, and prone to procrastination, Americans generally get the job done. The same can—and must—be true of...

  12. Chapter 8 Concluding Thoughts: A Nation That Balances Its Books and a Government That Invests in America’s Future
    (pp. 133-138)

    This or any other discussion of debt is filled with myriad economic issues, potential consequences, and paths out of the woods, but there is also a host of ethical and philosophical concerns. These go beyond the sheer propriety of borrowing trillions and passing the buck to our grandchildren for our present-day consumption. They also get to the question of what kind of nation we want to be, and what role government should have in shaping America in the twenty-first century. Spending and revenues constitute a good way of measuring, or at least inferring, what our priorities as a people and...

  13. Notes
    (pp. 139-165)
  14. Index
    (pp. 166-171)