…because I’m an economist and a mom–that’s why!

How Did You First Learn About the National Debt in School?

June 24th, 2012 . by economistmom

I have agreed to write a reference book on the U.S. national debt over the next year.  It is a book that would be found in the collections of public community libraries and the libraries of high schools and colleges–intended to be used by ordinary concerned citizens, high school AP government students, and college students in political science and economics courses.  For the students it would likely be a supplement to their main textbook, particularly useful in courses where the teacher wants to get into greater depth about the debt and deficits issue or where students are writing term papers on the topic.  I was motivated to agree to take this project on because I think there are big holes in the literature right now:  while there are some books on the debt that are written from a particular point of view with particular policy recommendations, there seem preciously few books that survey all different points of view and explain the big (economic and philosophical) tradeoffs in choosing among all the different policy options.  I also think (based on my reading of my own kids’ textbooks) that AP government textbooks don’t adequately explain what the federal debt is and why the students should care about it, which really troubles me given that they are the ones that will have to deal with it.

But I haven’t yet poured through the various text and reference books that talk about the national debt out there (but I will–this is a big summer project), so I was hoping you readers could first participate in this informal survey:  How did you first learn about the national debt in school–in high school or college–and what did you learn about it?  Did you learn about it as a simply mechanical and abstract thing that didn’t really pertain to you and your life, or were you made aware of how it might affect you more personally–even if largely through effects on the economy as a whole?  If you are someone who first learned about it as a grownup and by reading the news or books or websites on your own, do you feel you learned about it well, and easily?  What was the first lesson you “got”–as in, were told and understood–about why you should personally care about the debt?

10 Responses to “How Did You First Learn About the National Debt in School?”

  1. comment number 1 by: SteveinCH


    Good luck with the project. It sounds like an important one. To answer your question, I first learned about the national debt in grad school in the late 80s. I was a grad student at a public policy school and we did a simulation exercise where each of the students had to play a role on a debt commission under the Bush 41 administration.

    It was a great learning experience both about the debt and about the politics of it since the students were required to role play.

    As I recall, we ended in a stalemate over the very same issues we are stalemated on today.

  2. comment number 2 by: rjs

    i never went to school.
    i learned about the natl debt from howard ruff, “how to survive the coming bad years” circa late 70s…the world was going to end in the 80s because of the debt…ruff’s friend, george bush called reagan’s budget “voodoo economics”

  3. comment number 3 by: David D.

    Good luck with the project. “Where does the money go?” by Bittle & Johnston is a great place to start. It tells the story in a fun way with a lot of pictures and painstakingly tries to be non-partisan.

  4. comment number 4 by: KGB

    When I first learned of the national debt I thought it was disgracefully imprudent and questioned the teacher. The explanation was that so long as the debt promoted economic growth faster than the growth of debt then the debt actually shrank as a proportion of Gross National Product and was not a concern but a blessing.

    As we know debt is used to buy votes with social programs. Little or none of the debt contributes to economic growth. The debt as a proportion of GNP has increased until the USA can barely afford to pay the interest on the debt, much less repay the debt. The size of the debt has reached catastrophic dimensions.

    Debt financed government expenditures increase during business cycle recessions. Keynes claimed that government deficit stimulus spending lessened the depth of recessions and sped recovery. His premise was soundly refuted by Friedrich Hayek. Hayek explained that government deficit spending subtracted from long term economic growth and prosperity during the repayment period. Keynes agreed with Hayek’s analysis though he justified himself with the famous quote, “In the long term we are all dead.”

    During the past thirty years politicians have finessed the negative effect on prosperity of repaying Keynesian deficit stimulus spending. They merely avoided repaying for thirty years. Similarly individuals can avoid repaying a credit card. The crunch comes when the individual or government cannot afford to pay the minimum/interest on the accrued debt.

    Two options are available when government cannot pay the interest on debt. First the government can renege outright. Reneging would be catastrophic when the debt is held by national banks. Second the government can inflate the debt away by printing and debasing the currency. The resulting hyperinflation destabilizes society as Germany learned during the thirties. Hyperinflation is only suitable for hand to mouth societies where most citizens have no wealth. Thus hyperinflation is commonly used by Southern European and African nations.

    The best way to address large debt is to slowly pay down the debt. Prosperity and economic growth suffer during the repayment period. However, catastrophe is avoided.

  5. comment number 5 by: Heather

    As Policital Science major in the late nineties, I remember talking with a staffer from the Concord Coalition at an event.

    They now have a great website.The Concord Coalition is a nonpartisan, grassroots organization dedicated to fiscal responsibility.

  6. comment number 6 by: Heather

    I remember the passion of the staffer, and how the materials were easily to understand. The counter was easy to relate to and helped explain deficits and the national debt. Thanks!

  7. comment number 7 by: B Davis

    If you are someone who first learned about it as a grownup and by reading the news or books or websites on your own, do you feel you learned about it well, and easily? What was the first lesson you “got”–as in, were told and understood–about why you should personally care about the debt?

    I believe that I first became aware of the debt as a major issue during the presidential election of 1992. Looking through the books that I have from that time, the first one appears to be United We Stand: How We Can Take Back Our Country by Ross Perot, published in 1992. As much as Perot was chided for his charts, I think that he did an invaluable service in waking many people up to the issue. By the way, Diane, I notice that Perot’s Charts listed on your Blogroll no longer works. It’s unfortunate that Perot seems to have discontinued this web site. However, I have been posting similar graphs on my web site and I’m sure others have been doing the same.

    I also read Bankruptcy 1995 by Harry Figgie and Facing Up by Peter Peterson, both published in 1993. I think that the latter was an especially good book. Looking back, however, I noticed that all of those books tended to show the debt and deficit in current dollars, not corrected for inflation. I think it’s good to show the debt as a percentage of GDP and perhaps also corrected for inflation and/or population. Also, I think it’s good to get into the various measures of the debt such as the debt held by the public, the gross federal debt, and the net position of the United States as stated in the Financial Report of the United States Government.

    I was also drawn to the issue by some seemingly misleading coverage of the debt by various national publications. I may mention those in a later post. Anyhow, good luck on your project! I think that it’s critical to provide the vast majority of Americans a clear understanding of the debt. This is likely the only way that we can create a national consensus to deal with it in a rational and timely manner.

  8. comment number 8 by: Mark

    I first seriously learned about the debt in a college Econ course, early 90’s. The text had a very nice graph of the debt through the course of American history. Of course, I knew it was there well before that, primarily through the news. But I would not say I had “learned about it”. I think once one realizes that our modern debt levels did not even start until Nixon puts a very different aspect on the discussion.

    I was in 7th grade when JFK was assassinated. We didn’t have any discussions of the national debt, that I recall, in high school. I quit university after a year or two, and returned for my degree 20 years later.

  9. comment number 9 by: Patrick R. Sullivan

    It would be better to write a sitcom for the public along the lines of the old BBC, ‘Yes, Prime Minister’. That would truly be educational.

  10. comment number 10 by: Jim Glass

    I became interested in the subject back reading the report of the Social Security Advisory Commission of 1993 — the one that escaped from the control of the SSA and actually had serious debates and made serious reform proposals.

    One of the key issues I picked up via them was: what *is* the national debt?

    The officially reported debt held by the public is one thing, $11 trillion.

    But then there is also the accrued liability for SS and Medicare benefits that the govt keeps off the books, *plus* that for all unfunded federal and military pensions. By all responsible accounting standards they should be on the books, but the fed govt keeps them off. (The leaders of any private sector firm that used such accounting would go directly to jail, no exaggeration.)

    The Federal Accounting Standards Advisory Board considered this issue in 2006, and its academic and private sector members unanimously recommended that the accrued liabilities be added to the national debt — but the political members vetoed the move.

    More about the FASAB and how the govt members can veto the majority’s recommendations, by two former FASAB members:

    Adding those accrued liabilities to the national debt would increase it by about $40 trillion.

    Then there is the open ended projection of expected future liabilities over expected future revenue, discounted to present value — that’s in excess of $100 trillion now, and growing.

    What’s the “real” debt? Well, every year an increasing amount of the $100 trillion rolls into the $40 trillion … and an increasing amount of the $40 trillion rolls into the $11 trillion … which is increasing by near a trillion a year going forward indefinitely all on its own, apart from whatever flows into it.

    So … you decide.