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


From Kirkus Reviews
A career technocrat's immensely informative, albeit against- the-grain, analysis of the perceived problems of federal budget deficits. Drawing on more than four decades' experience as a Washington insider (as a senior government economist under seven presidents and as head of the Federal Retirement Thrift Investment Board), Cavanaugh offers a remarkably clear, often engrossing rundown on government finance by setting the record straight on frightening fictions that have become staples of political rhetoric. First off, the author puts paid to any notion that the national debt imposes an unconscionable burden on future generations, arguing that the country owes its grandchildren progress in the utilization of human and material (rather than financial) resources. Nor does he put much stock in the assumption that Big Brother crowds out private investment, because federal deficits tend to be greatest when the domestic economy is slumping and credit demand is low. Cavanaugh also addresses the widely held belief that the national debt's interest costs are unsustainable; while such expenditures are completely uncontrollable, they are manageable, he asserts, concluding that interest should not be included in the federal budget (whose principal purpose is to contain spending). The author goes on to dismiss fears that US debt is enriching either the affluent or foreigners, pointing out most obligations of the Treasury are held by and for the benefit of middle-income Americans. He also shows that there's precious little risk of default by the Social Security trust fund (which has nothing to do with the federal deficit). Cavanaugh finishes with some modest reform proposals, notably, introduction of a system that would make legislators more accountable by subjecting them to the discipline of levying new taxes whenever federal outlays exceeded budgeted receipts. An uncommonly sensible challenge to conventional wisdom on a complex issue that's sure to be a focus of partisan debate in the 1996 presidential election and beyond. -- Copyright ©1996, Kirkus Associates, LP. All rights reserved.


Book Description
The Truth About the National Debt shatters five long-held myths and highlights one reality about what is now a $5 trillion national debt. Drawing on more than 30 years at the U.S. Department of the Treasury, where he served seven presidents, Cavanaugh argues that public debt is not all bad news. Instead, the problem is undisciplined government expenditures-whether financed by debt or taxes. He also outlines the real effects of the debt on future generations, private investment, interest rates, social security, and foreign investment and proposes a redefinition of the federal deficit to restore discipline and confidence in the management of the government's finances.

FROM THE PUBLISHER

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.

FROM THE CRITICS

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"

Kirkus Reviews

A career technocrat's immensely informative, albeit against- the-grain, analysis of the perceived problems of federal budget deficits.

Drawing on more than four decades' experience as a Washington insider (as a senior government economist under seven presidents and as head of the Federal Retirement Thrift Investment Board), Cavanaugh offers a remarkably clear, often engrossing rundown on government finance by setting the record straight on frightening fictions that have become staples of political rhetoric. First off, the author puts paid to any notion that the national debt imposes an unconscionable burden on future generations, arguing that the country owes its grandchildren progress in the utilization of human and material (rather than financial) resources. Nor does he put much stock in the assumption that Big Brother crowds out private investment, because federal deficits tend to be greatest when the domestic economy is slumping and credit demand is low. Cavanaugh also addresses the widely held belief that the national debt's interest costs are unsustainable; while such expenditures are completely uncontrollable, they are manageable, he asserts, concluding that interest should not be included in the federal budget (whose principal purpose is to contain spending). The author goes on to dismiss fears that US debt is enriching either the affluent or foreigners, pointing out most obligations of the Treasury are held by and for the benefit of middle-income Americans. He also shows that there's precious little risk of default by the Social Security trust fund (which has nothing to do with the federal deficit). Cavanaugh finishes with some modest reform proposals, notably, introduction of a system that would make legislators more accountable by subjecting them to the discipline of levying new taxes whenever federal outlays exceeded budgeted receipts.

An uncommonly sensible challenge to conventional wisdom on a complex issue that's sure to be a focus of partisan debate in the 1996 presidential election and beyond.