The Truth About the National Debt
Remember the early-to-mid 1990s? Republicans were using the “obscene” national debt to make political hay against the Democrats, who held the White House.
Now reread the previous sentence.
Okay, now—just for fun—swap the words “Republicans” and “Democrats,” and change the verbs to present tense. Voila! It’s now a 2006 sentence!
Funny how that works, isn’t it? Politics is so, so predictable.
Do you know anybody who could use a good dose of the truth about the national debt? Truth that, believe it or not, is completely unaffected by which party occupies the White House? If so, read this concise little gem of a book, pictured below, and you’ll be more than ready for the demagogues and sloganeers, regardless of their party affiliation. It was written ten years ago by Francis X. Cavanaugh, an economist who had been responsible for debt management policy at the Treasury Department, under several administrations. The book’s relevance has only increased since its publication in 1996.
Here’s a link to it at Amazon.com. [Full disclosure: I’ll make forty cents if you buy it from that link; to sidestep that, go to Amazon and search for ISBN 087584734X.]
Only nine bucks for one hundred-fifty pages of concisely-written myth debunkings. That’s six cents a page; sheesh, what a bargain.
Here are two excerpt from chapter 9, "Why the Myths Persist"; click to enlarge.
Clip 1:
Clip 2:
By the way, many thanks to reader Wayne Floyd, who sent me an email asking me for some book recommendations. As I was making the list for him, I pulled Cavanaugh's book down off the shelf, enjoyed some deja-vu as I skimmed my ten-year-old highlights—then wrote the author a belated thank-you letter. Lastly, an added bonus: I finally located the source for the Milton Friedman quote I used in the article I wrote last year titled “What’s so scary about debt held by foreigners?”. Friedman’s quote is on page 73 of Cavanaugh’s book. Here it is again, this time properly cited using Cavanaugh’s end notes:
It is a mystery to me why... it is regarded as a sign of Japanese strength and American weakness that the Japanese find it more attractive to invest in the U.S. than Japan. Surely it is precisely the reverse - a sign of U.S. strength and Japanese weakness.
—Milton Friedman, “Why the Twin Deficits Are a Blessing,” Wall Street journal, Feb. 14, 1988, A18.
Get the book and read it. [After that, if you’re interested in the single, minor exception I took with his conclusion, let me know and I’ll send you the relevant portion of my letter to him.]
