America's Fiscal Constitution

February 1, 2014
Looking to beat up on George W. Bush some more? There's plenty of ammunition in this chronicle of the collapse of federal fiscal discipline during the previous administration. The federal government is no stranger to debt, writes former Houston mayor and Texas gubernatorial candidate White. But by virtue of "informal but well-understood rules, an unwritten constitution," the government, from the end of the Revolutionary War through 9/11, borrowed during severe downturns to make up for lost revenue and then promptly balanced the budget. It also borrowed to expand national borders, as with the Louisiana Purchase, and in times of war--though it also financed war with new and expanded taxes. That ended in 2001, when, for the first time in American history, the Bush administration took the wars in Afghanistan and Iraq off the books and financed them strictly by debt, which flies in the face of all fiscal wisdom. Moreover, the Bush administration even pressed to lower taxes; only John McCain and two other Republicans, White notes, "opposed cutting taxes during war" by voting against a Bush-fomented bill that did just that. Writing in vigorous, plain English, the author turns a few falsehoods on their heads while making his argument--e.g., Franklin Roosevelt did not sink the nation into debt through federal spending in the Depression; the Social Security trust is sound; it would not harm the economy to balance the budget. White's battle is certainly uphill, given that both parties have become accustomed to staggering levels of debt that he warns are unsustainable. However, rather than merely argue in the abstract, the author undergirds his case by recommending specific steps to alleviate the crisis, including, among others, establishing solely tax-financed budgets and putting bonds up for national election. Reading between the lines, White is recommending much more--and therein lies controversy, especially when it comes to military spending. A book that deserves much attention.

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April 15, 2014
White, an executive and a politician, traces the history of Americans limiting our federal debt. Except for our first few decades, acceptable debt included borrowing to preserve the union and borrowing to expand and connect the nation's borders. Budget battles have raged in Congress, beginning with George Washington's administration, and today's budget problems seem manageable compared to those that challenged Americans immediately after the Revolutionary War and the Civil War and from the Great Depression through WWII. After 2000, White indicates, our politicians from both major parties changed the very nature of federal borrowing by actions including waging war without raising taxes, relying heavily on foreign creditors, and substituting federal debt for payroll contributions supporting the Social Security trust fund. White concludes that Americans todaylike those in prior generationsrecognize that the use of debt to fund routine spending can compromise the future of young citizens, the ability to be independent of foreign creditors, and the capacity to use national savings to invest in private sector jobs. (Reprinted with permission of Booklist, copyright 2014, American Library Association.)