We have currently 2 border collies-- 3yearcless and 7 months. Border Collies are sound/noise sensitive, so any alarming sound is issues for them. But also moving objects: cars, bicycles and running children are challenges. Like other things in life here, one is required(?, or at least the majority do ) to take a puppy training course of a couple of weeks. Partly, due to insurance requirements, and because you learn a lot. I'm not sure about how things are in the States. but our insurance would pay for a session or two with a behaviorist. Having said that I will say that medication is only used here in the severest of instances, as it cannot 'cure' the problem at hand. There are non-invasive/additive herbs that you should be able to get from your local Vet.
I would rec seeking out a few sessions with any of the many professional dog behavioral trainers out there. Americans excel in this area- especially the police and military ex-people. Or, seek out a reputable source from the Internet. Of course putting the dog in a bigger and stronger iron cage will save your carpet, but it won't solve the dog's problem (perhaps re-enforced it). Glad to hear of people like you and your family who goes to the Pound to offer a better life to an animal that others may have (unwittingly) abused. Good Luck.