America's Fiscal Constitution

Praise for
America’s Fiscal Constitution

“Something remarkable . . . a fascinating book about our economic history. . . .
America’s Fiscal Constitution
tells the story of how America has dealt with its debt since its founding, and in doing so provides a compelling roadmap to a more responsible fiscal future.”

—
President Bill Clinton

“Our nation cannot be strong militarily, diplomatically, or politically unless it is strong economically, and we cannot remain strong economically unless we deal with our massive debt burden. . . . A must read for those who believe that we should get our economic house in order.”

—
James A. Baker, III, former Secretary of the Treasury and Secretary of State

“In order to understand our fiscal plight, it’s crucial to appreciate how carefully America has dealt with debt in the past. Bill White makes that tale fascinating.”

—
Walter Isaacson, bestselling author and former CEO of CNN and managing editor of
Time
magazine

“Lucid and pioneering . . . a compelling and illuminating formula for both economic growth and fiscal restraint.”

—
James MacGregor Burns, Pulitzer Prize–winning historian and Professor Emeritus at Williams College

“There are few Americans I trust more than Bill White. With history as his guide, White trail-blazes through the Washington, DC, bureaucratic jungle, revealing Big Truths that are bolstered with Hard Facts.”

—
Douglas Brinkley, professor at Rice University and CBS News historian

“A thought-provoking and well-told history of our nation’s traditional financial principles. Every citizen can benefit from this book’s practical insights.”

—
Ross Perot

“Bill White’s thorough understanding of both finance and government allows him to trace the history of America’s path to the edge of fiscal irresponsibility.”

—
Erskine Bowles, co-chairman of National Commission on Fiscal Responsibility

“Powerful, penetrating and persuasive . . . a
tour de force
of our fiscal history. A timely and important contribution to the raging debate on our fiscal future.”

—
Kent Conrad (D), former chairman of the US Senate Budget Committee

“Our federal statutory debt is now larger than the entire American economy. This is unsustainable. Everyone needs to read this book . . . now.”

—
Pete Domenici (R), former chairman of the US Senate Budget Committee

No part of this book may be reproduced in any manner whatsoever without written permission except in the case of brief quotations embodied in critical articles and reviews. For information, address PublicAffairs, 250 West 57th Street, 15th Floor, New York, NY 10107.

PublicAffairs books are available at special discounts for bulk purchases in the U.S. by corporations, institutions, and other organizations. For more information, please contact the Special Markets Department at the Perseus Books Group, 2300 Chestnut Street, Suite 200, Philadelphia, PA 19103, call (800) 810-4145, ext. 5000, or e-mail
[email protected]
.

Book design by Trish Wilkinson

Set in 11-point Adobe Garamond Pro

Library of Congress Cataloging-in-Publication Data

White, William H., 1954–

America’s fiscal constitution : its triumph and collapse / Bill White. —

First edition.

pages cm

Includes bibliographical references and index.

ISBN 978-1-61039-344-7 (e-book)

1. Debts, Public—United States—History.

2. Budget—United States—History.

3. Fiscal policy—United States.

4. United States—Appropriations and expenditures.

5. United States—Economic policy—2009– I. Title.

HJ8119.W45

2014

336.73—dc23

2013042841

First Edition

10

9

8

7

6

5

4

3

2

1

To my parents—and others in their generation—who worked to create a brighter future for their children and limited federal debt for decades after World War II

C
ONTENTS

Author’s Note

1

T
HE
A
MERICAN
F
ISCAL
T
RADITION

PART I | A NEW NATION AND DEMOCRATIC PARTY LIMIT FEDERAL DEBT: 1789–1853

2

D
EBT
G
IVES
R
ISE TO A
N
EW
N
ATION AND
P
OLITICAL
P
ARTY