In addition to the new material (about 6,000 words), all statistics will be updated and more charts and graphs will be added to provide insight.
Chapter 1. Crash Course on the National Debt
This chapter delves into the role of the government in the U.S. economy. The government must provide certain essential goods and services for its taxpayers. In turn, the government collects taxes to pay for these goods and services. But when the government spends more than it takes in, a deficit occurs, and the government must borrow to pay for its overspending. This chapter takes a look at the budget process and the different types of budgets: balanced, deficit, and surplus.
Chapter 2. A Huge Credit Card
This chapter introduces the history of the debt and the issuing agency, the Bureau of the Public Debt. It examines details of the agency's financing instruments, Treasury securities, and savings bonds. Other main topics include the ownership of the debt, United States versus foreign, and interest payments, which hamper the government's ability to balance the budget.
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Chapter 3. Primer on the Current Global Economy
Our Interconnected World
--Policies and Events in One Country Affect Other Countries
--The Impact of Weakening Economies on the U.S.
--Trade Downturns
--Declining Income and Jobs
Potential Global Recession
China: Long-term Slowing?
European Debt Crisis
--Spreading Financial Disease Across the Globe for Years to Come?
World's Financial Markets
--Unresolved Banking Crises
--Periodic Stock Market Selloffs
Economic Growth Key to Revenue Growth
--Revenue Key to Managing Deficit
--Earnings Stagnant
Impact on the U.S. Budget and Deficit
Chapter 4. Deficit and Debt Projections
This chapter describes how the government's spending and tax policies influence output. The government has historically used fiscal policies to alter the macro economy, with some successes and some failures. We will look at an overview of recent fiscal policies, including the economic stimulus package designed to combat the December 2007 downturn, and impacts on the deficit and debt. This chapter introduces the rising debt compared with gross domestic product (GDP), considers the productive capacity debate, and provides projections on the debt trend.
Chapter 5. Do Deficits and the Debt Matter?
This chapter sets the stage for the debt debate. It was back in 2002, at a meeting of President Bush's economic advisors, that Vice President Dick Cheney said, Deficits don't matter, a viewpoint many politicians and economists have held for years. The deficit at that time was just $158 billion. Now some in Congress and many interest groups say deficits matter a great deal, and we must eliminate deficits and pay down the debt. others say no, we must spend in the face of economic hard times.
NEW ADDITIONS FOR THE SECOND EDITION:
Changing Demographics
--Historical Overview of Social Security
--Historical Overview of Medicare
--Historical Overview of Medicaid
Chapter 6. Deficits Do Not Matter
This chapter focuses on the viewpoint that deficit spending is not a concern to the health of the U.S. economy. In fact, sometimes running a deficit contributes beneficial effects for the economy. Government spending supports the economy through building strong economic growth and more jobs. The federal government's deficit financing provides many essential services to society, such as national defense, education, public welfare, Social Security, Medicare, and Medicaid. In addition, the government sells Treasury securities and savings bonds to finance the debt. Not only are these important savings instruments for investors, but the Federal Reserve formulates monetary policy using government securities. A common view says that Treasuries can be issued continually to finance the government's needs, and it is not imperative to pay down the debt. The United States is not unique in its deficit situation.
NEW ADDITIONS FOR THE SECOND EDITION
How Deficits Help Other Major Economies
Sidebar: Interview with a Leading Economist Who Favors Deficit Spending
Chapter 7. Deficits Do Matter
This chapter explores the concerns with deficit financing. It provides a deeper explanation as to why some feel the debt matters more now than it has in the past. You will be introduced to both the long-time arguments against deficit financing-burden to future generations, hefty interest payments, crowding out of the lending, and economic instability-along with some new twists. The United States has an increased reliance on foreign creditors. China is now our number one creditor.
Chapter 8. Get a Handle on the National Debt
This chapter teaches the reader about government spending and ways to curb deficit spending. Pork projects impact government money spent in a particular locale and bring advantages to their political representatives. Fundamental reform of Social Security, Medicare, and Medicaid programs will be highlighted as options to aid the debt drain. The chapter also provides an overview of the debt ceiling, and the pros and cons of raising it.
NEW ADDITIONS FOR THE SECOND EDITION
UPDATE ON REFORM ENTITLEMENT PROGRAMS
--Allow States to Make Decisions
--Budget with a Long-Term View
Appendix A, Voice Your Opinion on the Debt
This appendix provides readers with simple but important take-charge options. The public can make contributions to help pay down the debt, become educated taxpayers, submit ideas to their congressman, and exercise their right to vote. If you want to make an impact and be heard, this appendix is a must-read.
Appendix B, Web Sites for Debt and Deficit Information
This appendix lists resources to check out for current, up-to-date information about the debt and deficit. A host of government agency web sites, economic think tanks, and academic sites are available. This is a complex problem, so be sure to have access to the sources that can provide current information as the various issues emerge.
*NEW**Appendix C, Political Views of the Debt
Political Parties' Plans to Reduce the Debt and Deficit
Philosophical Underpinnings
Track Record
