• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

The Myth Of The Clinton Surplus

Strucky

Strucky

.
Banned
DP Veteran
Joined
Aug 11, 2009
Messages
2,075
Reaction score
504
Location
unknown
Gender
Undisclosed
Political Leaning
Libertarian - Right
Posted the following in another thread...Thought it should be in it's own thread.


The Myth of the Clinton Surplus

Time and time again, anyone reading the mainstream news or reading articles on the Internet will read the claim that President Clinton not only balanced the budget, but had a surplus. This is then used as an argument to further highlight the fiscal irresponsibility of the federal government under the Bush administration.

The claim is generally made that Clinton had a surplus of $69 billion in FY1998, $123 billion in FY1999 and $230 billion in FY2000 . In that same link, Clinton claimed that the national debt had been reduced by $360 billion in the last three years, presumably FY1998, FY1999, and FY2000--though, interestingly, $360 billion is not the sum of the alleged surpluses of the three years in question ($69B + $123B + $230B = $422B, not $360B).

While not defending the increase of the federal debt under President Bush, it's curious to see Clinton's record promoted as having generated a surplus. It never happened. There was never a surplus and the facts support that position. In fact, far from a $360 billion reduction in the national debt in FY1998-FY2000, there was an increase of $281 billion.

Verifying this is as simple as accessing the U.S. Treasury (see note about this link below) website where the national debt is updated daily and a history of the debt since January 1993 can be obtained. Considering the government's fiscal year ends on the last day of September each year, and considering Clinton's budget proposal in 1993 took effect in October 1993 and concluded September 1994 (FY1994), here's the national debt at the end of each year of Clinton Budgets:



FY 1993 09/30/1993 $4.411488 trillion
FY1994 09/30/1994 $4.692749 trillion -$281.26 billion
FY1995 09/29/1995 $4.973982 trillion -$281.23 billion
FY1996 09/30/1996 $5.224810 trillion -$250.83 billion
FY1997 09/30/1997 $5.413146 trillion -$188.34 billion
FY1998 09/30/1998 $5.526193 trillion -$113.05 billion
FY1999 09/30/1999 $5.656270 trillion -$130.08 billion
FY2000 09/29/2000 $5.674178 trillion -$17.91 billion
FY2001 09/28/2001 $5.807463 trillion -$133.29 billion

As can clearly be seen, in no year did the national debt go down, nor did Clinton leave President Bush with a surplus that Bush subsequently turned into a deficit. Yes, the deficit was almost eliminated in FY2000 (ending in September 2000 with a deficit of "only" $17.9 billion), but it never reached zero--let alone a positive surplus number. And Clinton's last budget proposal for FY2001, which ended in September 2001, generated a $133.29 billion deficit. The growing deficits started in the year of the last Clinton budget, not in the first year of the Bush administration.

Keep in mind that President Bush took office in January 2001 and his first budget took effect October 1, 2001 for the year ending September 30, 2002 (FY2002). So the $133.29 billion deficit in the year ending September 2001 was Clinton's. Granted, Bush supported a tax refund where taxpayers received checks in 2001. However, the total amount refunded to taxpayers was only $38 billion . So even if we assume that $38 billion of the FY2001 deficit was due to Bush's tax refunds which were not part of Clinton's last budget, that still means that Clinton's last budget produced a deficit of 133.29 - 38 = $95.29 billion.

Clinton clearly did not achieve a surplus and he didn't leave President Bush with a surplus.

So why do they say he had a surplus?

As is usually the case in claims such as this, it has to do with Washington doublespeak and political smoke and mirrors.

Understanding what happened requires understanding two concepts of what makes up the national debt. The national debt is made up of public debt and intergovernmental holdings. The public debt is debt held by the public, normally including things such as treasury bills, savings bonds, and other instruments the public can purchase from the government. Intergovernmental holdings, on the other hand, is when the government borrows money from itself--mostly borrowing money from social security.

Looking at the makeup of the national debt and the claimed surpluses for the last 4 Clinton fiscal years, we have the following table:

-------

Notice that while the public debt went down in each of those four years, the intergovernmental holdings went up each year by a far greater amount--and, in turn, the total national debt (which is public debt + intergovernmental holdings) went up. Therein lies the discrepancy.

When it is claimed that Clinton paid down the national debt, that is patently false--as can be seen, the national debt went up every single year. What Clinton did do was pay down the public debt--notice that the claimed surplus is relatively close to the decrease in the public debt for those years. But he paid down the public debt by borrowing far more money in the form of intergovernmental holdings (mostly Social Security).

----------------

Theres tons more to read in the link
 
The Myth of the Clinton Surplus, Part II (Follow up article)

Ever since I wrote an article that demonstrated that President Clinton never had a surplus, people have been skeptical. After all, Clinton's alleged surpluses have been accepted by the media and repeated so much that it's taken as gospel truth.

The claim is made that in Fiscal Year 2000, President Clinton ran a budget surplus of $236 billion. My previous article demonstrates that far from a surplus, the government had to increase the national debt by $18 billion. How can you claim a surplus when you have to borrow more money?

Indeed, citizens that hear about the Clinton "surplus" but also know the national debt never went down may legitimately ask, "How can the national debt increase even when the government supposedly has a surplus?" This article will provide a detailed explanation of how Clinton claimed a surplus even when the government borrowed $18 billion more the same year.

-------------

How the National Debt Is Calculated

The national debt obviously isn't calculated the same way we would think. If there's a $236 billion surplus then most people would think the national debt would go down by $236 billion. Instead it went up by $18 billion. This is the difference that must be explained.

Public Debt is calculated by taking the previous year's public debt and adding the total unified budget deficit (or subtracting the surplus), and then adding any "other means of financing."

Intragovernmental Debt is calculated by taking any trust fund surpluses and adding it to the previous year's intragovernmental debt.

Total National Debt is calculated by adding the public debt to the intragovernmental debt. As a result, the national debt can increase even when the public debt decreases if the intragovernmental debt increases by a larger amount.

Why? When a trust fund (such as social security) takes in more money than it pays out in benefits, it takes the extra money and "invests" it in government bonds. Essentially social security says "We received $100 billion in social security contributions but only paid out $80 billion in benefits, so we take the extra $20 billion and buy U.S. government bonds." Social security doesn't keep the extra cash but rather loans it to the U.S. government and, in return, it gets a U.S. government bond. That means the U.S. government can immediately spend that $20 billion on normal government operations but owes that $20 billion to Social Security. Hence one part of the government (the U.S. Federal Government general fund) owes $20 billion to another part of the government (Social Security). That is intragovernmental debt.

Whenever a trust fund has a surplus intragovernmental debt will increase because the surplus money is automatically loaned to the federal government's general fund. That money is then used by the federal government for its normal operations. The fact that a trust fund has a surplus simply means the federal government doesn't need to borrow as much money directly from the public since it's receiving extra money from the trust funds. It's still borrowing money--just from a trust fund rather than the public.

------------

Isn't That a Surplus?

No, that's not a surplus.

If in a given year you earn $30,000 and a friend loans you $5,000, and you spend $32,000, is that a surplus? While you can claim "I received $35,000 and only spent $32,000, thus I have a surplus," that's a pretty weak argument when you know that $2,000 of the money you spent was actually borrowed and has to be paid back later. That's pretty much what happened in 2000.

An article at Factcheck is often used to respond to my original article. The article cites Congressional Budget Office (CBO) numbers that cite an on-budget surplus of $87.2 billion and an off-budget (Social Security) surplus of $149.8 billion. The Factcheck article says: "But even if we remove Social Security from the equation, there was a surplus of $1.9 billion in fiscal 1999 and $86.4 billion in fiscal 2000."

The above Factcheck statement acknowledges the fact that Social Security trust fund surpluses really don't have anything to do with the president's budget, nor can they really be considered part of a surplus since they'll have to be paid back to Social Security later. So they argue that even if you don't count the $149.8 billion Social Security surplus, President Clinton was still responsible for an "on-budget" surplus of $86.4 billion

What Factcheck does not mention, however, is that while Social Security is the only off-budget trust fund, it's not the only trust fund. Just as surpluses caused by Social Security should not be considered a real surplus caused by a president's budget, nor should surpluses caused by other trust funds be considered. The following table shows the major trust funds that contributed to surpluses in 2000. These numbers come from Table 6 Schedule D of the MTS for September 2000 . That table contains a complete list of all the trust funds and government accounts that contributed to the "surplus" due to their excess funds.

TRUST FUND SURPLUSES IN 2000

Social Security $152.3 billion
Civil Service Retirement Fund $30.9 billion
Federal supplementary medical insurance Trust fund $18.5 billion
Federal Hospital Insurance Trust Fund $15.0 billion
Unemployment Trust Fund $9.0 billion
Military Retirement Fund $8.2 billion
Transportation Trust Funds $3.8 billion
Employee lice insurance & retirement $1.8 billion
Other $7.0 billion
TOTAL $246.5 billion

---------------------

Tons more in the link
 
Mind. Blown.


I always wondered why it seemed Clinton just magicked a massive surplus out of a supposed sea of debt...
 
I remember hearing about the smoke and mirrors of this surplus in 2000,but never really paid any attention to it until a few years ago.
 
Strucky said:
I remember hearing about the smoke and mirrors of this surplus in 2000,but never really paid any attention to it until a few years ago.
Click to expand...

Yeah I always see this comic floating around talking about "fiscal conservatives" and their debt, and then is has Clinton as a "Tax and Spend liberal" with his massive surplus...interesting.


More political bull**** as usual.
 
It is accurate that there was no actual surplus under Clinton. What you are trying to hide is that we were as close to having a balanced budget during that time as we have been since I think the 60's. When it comes to the deficit, we have had one fiscally responsible president in my lifetime, and he was a democrat.
 
Redress said:
It is accurate that there was no actual surplus under Clinton. What you are trying to hide is that we were as close to having a balanced budget during that time as we have been since I think the 60's. When it comes to the deficit, we have had one fiscally responsible president in my lifetime, and he was a democrat.
Click to expand...

Was he really fiscally responsible? The only way he could achieve those numbers was by severely cutting the budgets of defense and intelligence. Much of the money that Bush had to spend in the early years of his presidency was to rebuild those areas. They were cut to far to be useful when we needed them. It's possible that since Clinton cut the HUMINT side of intelligence, we could have detected the 9/11 plot. Way to go Clinton!
 
natdebt.gif

inflation.gif


As you can see by the graphs, it went up but it did so slower than the rate of inflation. And no matter what graph you read, it still looks better than the 10 years before and the 8 years after his administration.
 
Last edited:
reefedjib said:
Was he really fiscally responsible? The only way he could achieve those numbers was by severely cutting the budgets of defense and intelligence. Much of the money that Bush had to spend in the early years of his presidency was to rebuild those areas. They were cut to far to be useful when we needed them. It's possible that since Clinton cut the HUMINT side of intelligence, we could have detected the 9/11 plot. Way to go Clinton!
Click to expand...

The cuts Clinton made with the military are both exaggerated, and a continuation of President Bush the elders "peace dividend". Note that the military that won in both Afghanistan and Iraq where a direct result of the Clinton budgets.
 
Redress said:
The cuts Clinton made with the military are both exaggerated, and a continuation of President Bush the elders "peace dividend". Note that the military that won in both Afghanistan and Iraq where a direct result of the Clinton budgets.
Click to expand...

Bush 41 started "peace dividend" cuts. Clinton accelerated them and gutted defense and intelligence.

"Clinton cut our military and intelligence spending by 35 percent"

"By the mid 1990s the intelligence community was operating with a significant erosion in resources and people, and was unable to keep pace with technological change. When I became director of central intelligence, I found a community and a CIA whose dollars were declining and whose expertise was ebbing. We lost close to 25 percent of our people and billions of dollars in capital investment."

"Of the 305,000 employees removed from the federal payroll, 286,000 (or 90%) were military cuts.The statistics for America’s defense during the Clinton years reveal the deep-seated animosity of the administration toward those who served in the military. The Army was cut from 18 divisions to 12. The Navy was reduced from 546 ships to 380. Air Force flight squadrons were cut from 76 to 50."

Bush 43 had to rebuild capability and is the source of a lot of his deficits.

The military had to go into Iraq with much less military than was recommended and could have prevented a lot of the chaos. This was a direct result of Clinton's cuts.

The is how Clinton reduced the budget deficit.
 
Tsunami said:
natdebt.gif

inflation.gif


As you can see by the graphs, it went up but it did so slower than the rate of inflation. And no matter what graph you read, it still looks better than the 10 years before and the 8 years after his administration.
Click to expand...

Wait until Obama's number hit the graph...
 
reefedjib said:
Bush 41 started "peace dividend" cuts. Clinton accelerated them and gutted defense and intelligence.

"Clinton cut our military and intelligence spending by 35 percent"

"By the mid 1990s the intelligence community was operating with a significant erosion in resources and people, and was unable to keep pace with technological change. When I became director of central intelligence, I found a community and a CIA whose dollars were declining and whose expertise was ebbing. We lost close to 25 percent of our people and billions of dollars in capital investment."

"Of the 305,000 employees removed from the federal payroll, 286,000 (or 90%) were military cuts.The statistics for America’s defense during the Clinton years reveal the deep-seated animosity of the administration toward those who served in the military. The Army was cut from 18 divisions to 12. The Navy was reduced from 546 ships to 380. Air Force flight squadrons were cut from 76 to 50."

Bush 43 had to rebuild capability and is the source of a lot of his deficits.

The military had to go into Iraq with much less military than was recommended and could have prevented a lot of the chaos. This was a direct result of Clinton's cuts.

The is how Clinton reduced the budget deficit.
Click to expand...

That is a good example of why people who don't know what they are talking about should keep quiet. Let's look at one aspect of the budget cuts, the base closure committee.

[ame=http://en.wikipedia.org/wiki/Base_Realignment_and_Closure]Base Realignment and Closure - Wikipedia, the free encyclopedia[/ame]

Base Realignment and Closure (or BRAC) is a process of the United States federal government directed at the administration and operation of the Armed Forces, used by the United States Department of Defense (DoD) and Congress to close excess military installations and realign the total asset inventory in order to save money on operations and maintenance, aimed at achieving maximum efficiency in line with Congressional and DoD objectives. More than 350 installations have been closed in four BRAC rounds: 1989, 1991, 1993, and 1995. The most recent round of BRAC completed in the fall of 2005 and with the commission's recommendations became law in November 2005.
Click to expand...

The reason these have been continued even under Bush the younger...because they have been a huge success, cutting costs without hurting military readiness. Saying a 35 % cut is not telling the whole story, not even close to it. The military today is much leaner and less wasteful than the military under Reagan.
 
Redress said:
That is a good example of why people who don't know what they are talking about should keep quiet.
Click to expand...

You should have taken your own advice.

Redress said:
Let's look at one aspect of the budget cuts, the base closure committee.

Base Realignment and Closure - Wikipedia, the free encyclopedia



The reason these have been continued even under Bush the younger...because they have been a huge success, cutting costs without hurting military readiness. Saying a 35 % cut is not telling the whole story, not even close to it. The military today is much leaner and less wasteful than the military under Reagan.
Click to expand...

They've consolidated and saved money. I didn't claim that all 35% of reductions weren't useful. Did you think that? My base in Germany got closed as we realigned there. However, they were able to make these closures happen because they reduced the headcount of our forces. Less people need less facilities. And it was people we needed more of when we went to war. So now we have been expanding our headcount...
 
reefedjib said:
You should have taken your own advice.



They've consolidated and saved money. I didn't claim that all 35% of reductions weren't useful. Did you think that? My base in Germany got closed as we realigned there. However, they were able to make these closures happen because they reduced the headcount of our forces. Less people need less facilities. And it was people we needed more of when we went to war. So now we have been expanding our headcount...
Click to expand...

The headcount reduction, while sizable, was not the sole reason for the base closures. To give the best example I can, since I was based there, let's look at NAS Cecil Fields Florida. Home of FA-18's and S-3's while I was there(and A-7's briefly). While I was there(pre-Clinton except for 5 months), hanger usage was never above about 60 %. Several barracks always sat empty. NAS Oceana in Virginia was able to absorb the FA-18s based at Cecil without much difficulty(and I think they took the S-3s too, though unsure on that). This is a pure money savings, and did not result from a reduced headcount. The base itself was over 22,000 acres, and cost a stupidly large amount to operate.

While the military shrunk headcount by more than it should have, it was still able to successfully handle the operations of both Iraq and Afghanistan. The issues with both have been much less to do with headcount than with overall strategy.
 
Redress said:
While the military shrunk headcount by more than it should have,
Click to expand...

I see you have conceded my point.

Redress said:
it was still able to successfully handle the operations of both Iraq and Afghanistan. The issues with both have been much less to do with headcount than with overall strategy.
Click to expand...

We can say that two things are true.

The first thing is what you are saying, that our forces were able to succeed, at a cost, and that the overall strategy was faulty for years.

The other thing that is true is that that cost could have been reduced with extra forces. For instance, they could have stopped the looting once Baghdad fell, if they had more troops. Seeing as how there were massive amounts of explosive looted at that time, the insurgency was able to build a large number of IEDs, VBIEDs, etc. that caused a lot of casualties.
 
reefedjib said:
The military had to go into Iraq with much less military than was recommended and could have prevented a lot of the chaos. This was a direct result of Clinton's cuts.
Click to expand...

Pure horsechunks.

Besides the fact that there was no reason to invade Iraq, it was Rumsfelds plan to use a small force, he could have used twice the size mobilized.

Even back then our military spending was an ungodly amount, we should easily be able to cut it by 3/4.


306994.jpg
 
reefedjib said:
I see you have conceded my point.
Click to expand...

When did I deny it. I just stated that the military cuts under Clinton have been exaggerated. The military was not that much less capable than it was during Reagan.



We can say that two things are true.

The first thing is what you are saying, that our forces were able to succeed, at a cost, and that the overall strategy was faulty for years.

The other thing that is true is that that cost could have been reduced with extra forces. For instance, they could have stopped the looting once Baghdad fell, if they had more troops. Seeing as how there were massive amounts of explosive looted at that time, the insurgency was able to build a large number of IEDs, VBIEDs, etc. that caused a lot of casualties.
Click to expand...

A larger force is almost always more capable than a smaller force. This does not mean we should draft every single adult into the military to make the largest possible force. Under Clinton, the force did get smaller than it should have, but under Clinton, the expectation of running two simultaneous large operations was pretty small. In point of fact, to my mind we should not have done it, since two large operations is asking for trouble, no matter the size of the military.

The other thing to note is that the people complaining the most about Clinton's cutting of the military(and it's funny how they never mention Bush the elder) are the people who complain the most about government spending.
 
Joe1991 said:
Besides the fact that there was no reason to invade Iraq, it was Rumsfelds plan to use a small force, he could have used twice the size mobilized.
Click to expand...

IIRC, he argued harshly with Powell over the size of the force used. He did gut the old warplan, deciding to go with a much smaller force. Of course, this does not help blame Clinton, so it's not going to be seen as relevant, just like Clinton gets blamed for reducing the military, not Bush the elder, nor Bush the younger who did base closures as well.
 
Joe1991 said:
Pure horsechunks.

Besides the fact that there was no reason to invade Iraq, it was Rumsfelds plan to use a small force, he could have used twice the size mobilized.

Even back then our military spending was an ungodly amount, we should easily be able to cut it by 3/4.
Click to expand...

Rumsfeld used the size force he could field, while still maintaining a reserve capable for addressing other problems if they arose and for instituting a rotating force system where forces would only stay in theater for 1 year. This had to be extended mater on to 15 months, I believe.

The rest of your comments are meaningless to this discussion.
 
Redress said:
A larger force is almost always more capable than a smaller force. This does not mean we should draft every single adult into the military to make the largest possible force. Under Clinton, the force did get smaller than it should have, but under Clinton, the expectation of running two simultaneous large operations was pretty small. In point of fact, to my mind we should not have done it, since two large operations is asking for trouble, no matter the size of the military.
Click to expand...

That's the thing, they did expect to fight two simultaneous large operations. That was, in fact, the objective for QDR (Quadrennial Defense Review) throughout the 80s, 90s and early 00s. I know because I build force assessment simulations for the 4 services in the 90s. And we went assessing smaller and smaller forces and having problems meeting the QDR objectives.

Redress said:
The other thing to note is that the people complaining the most about Clinton's cutting of the military(and it's funny how they never mention Bush the elder) are the people who complain the most about government spending.
Click to expand...

Well, first off Bush cut the force to a certain level, still remaining capable to address the QDR objective. As you said yourself, Clinton cut too far.

The thing they are complaining about, or that I complain about anyway, is the future projects for expenses in this country. They are far and away dominated by entitlement spending.
 
reefedjib said:
That's the thing, they did expect to fight two simultaneous large operations. That was, in fact, the objective for QDR (Quadrennial Defense Review) throughout the 80s, 90s and early 00s. I know because I build force assessment simulations for the 4 services in the 90s. And we went assessing smaller and smaller forces and having problems meeting the QDR objectives.
Click to expand...

Planning for, and expecting are two different things.



Well, first off Bush cut the force to a certain level, still remaining capable to address the QDR objective. As you said yourself, Clinton cut too far.

The thing they are complaining about, or that I complain about anyway, is the future projects for expenses in this country. They are far and away dominated by entitlement spending.
Click to expand...

[ame=http://en.wikipedia.org/wiki/2009_United_States_federal_budget]2009 United States federal budget - Wikipedia, the free encyclopedia[/ame] This page says you are misinformed or lying. No other federal program is as costly as the military, not counting the war on terror spending, not Veterans affairs spending or homeland security spending. The only thing larger is social security, which is not discretionary spending. In fact, DoD accounts for 515.4 Billion, next biggest discretionary budget is global war on terror, at 145.2 billion. Next is the first nonmilitary related thing, which is HHS, at 70.4 billion.
 
Redress said:
Planning for, and expecting are two different things.
Click to expand...

Huh? Nuts. Why plan if you don't expect it?

Redress said:
2009 United States federal budget - Wikipedia, the free encyclopedia This page says you are misinformed or lying. No other federal program is as costly as the military, not counting the war on terror spending, not Veterans affairs spending or homeland security spending. The only thing larger is social security, which is not discretionary spending. In fact, DoD accounts for 515.4 Billion, next biggest discretionary budget is global war on terror, at 145.2 billion. Next is the first nonmilitary related thing, which is HHS, at 70.4 billion.
Click to expand...

What's this nonsense about restricting it to discretionary spending? Mandatory spending means that you can't reduce it. That's even worse and starts to get at the problem.

Here is the current combined list, for those items greater that $100 billion:
$644 billion - Social Security
$515.4 billion - United States Department of Defense
$408 billion - Medicare
$360 billion - Unemployment/Welfare/Other mandatory spending
$260 billion - Interest on National Debt
$224 billion - Medicaid and the State Children's Health Insurance Program (SCHIP)
$145.2 billion(2008*) - Global War on Terror

Let's do a tally.
$660.6 billion = DOD and GWOT
$1.636 trillion = SS, Medicare, Medicaid, SCHIP, Unemployment/Welfare (all entitlement spending)

So entitlements are 2.477 times greater than defense spending.

But this is only the current picture. What does the growth of these expenses tell us: New CBO Budget Baseline Shows Entitlement Spending Imperiling Deficit Reduction Goals (note, these are 2007 numbers. Obama has exploded the deficit)
Entitlement Spending

  • The spending trends for Social Security, Medicare, and Medicaid present major obstacles to balancing the budget by 2012. Balancing the budget without tax increases requires lawmakers to limit 2012 federal spending to $294 billion above the 2007 level. However, spending on Social Security, Medicare, and Medicaid is projected to increase by $367 billion during that period. Thus, if lawmakers refuse to address these three entitlements, the rest of the budget would have to be reduced by $71 billion by 2012.
  • Over the next decade, Medicare and Medicaid costs will surge by nearly 8 percent per year, and Social Security costs by 6 percent annually. These programs will rise from 8.5 percent to 10.7 percent of GDP as the baby boomers begin to retire.
  • Medicare spending (including offsetting receipts) expanded 12 percent in 2006 and will grow 13 percent more in 2007. Combined Medicare and Medicaid spending now exceeds Social Security spending.
  • The Medicare drug entitlement is now projected to cost $822 billion through 2017. It will cost $60 billion per year by 2012 and $119 billion per year by 2017. Its annual expense will continue to increase thereafter.
Click to expand...

So it is the growth in Social Security, Medicare and Medicaid which are going to absolutely dominate the deficit.
 
Last edited:
This is TOTALLY WRONG, and based on a complete misunderstanding of these concepts.

Debt held by the public is the only debt that matters. It is debt owed to people outside the government.

Intragovernmental holdings mean nothing. They are money the govt. owes itself. Add it up, and it comes to zero. It's like borrowing money from your savings account to your checking account to cover a check, and promising yourself to pay it back. You will need to pay it back, but calling it "debt" is inaccurate.

Understanding what happened requires understanding two concepts of what makes up the national debt. The national debt is made up of public debt and intergovernmental holdings. The public debt is debt held by the public, normally including things such as treasury bills, savings bonds, and other instruments the public can purchase from the government. Intergovernmental holdings, on the other hand, is when the government borrows money from itself--mostly borrowing money from social security.

Looking at the makeup of the national debt and the claimed surpluses for the last 4 Clinton fiscal years, we have the following table:

-------

Notice that while the public debt went down in each of those four years, the intergovernmental holdings went up each year by a far greater amount--and, in turn, the total national debt (which is public debt + intergovernmental holdings) went up. Therein lies the discrepancy.

When it is claimed that Clinton paid down the national debt, that is patently false--as can be seen, the national debt went up every single year. What Clinton did do was pay down the public debt--notice that the claimed surplus is relatively close to the decrease in the public debt for those years. But he paid down the public debt by borrowing far more money in the form of intergovernmental holdings (mostly Social Security).
Click to expand...
 
reefedjib said:
Huh? Nuts. Why plan if you don't expect it?{/quote]

I have several fire alarms in my apartment, but I am not expecting to have a fire.



What's this nonsense about restricting it to discretionary spending? Mandatory spending means that you can't reduce it.
Click to expand...

That would be the point, yes. You reduce what you can, you cannot reduce what you cannot. I am a deficit hawk. I believe that every president in my lifetime has failed in this area, though Clinton by far less than others. To cut spending and cut the deficit, you have to cut spending, and yes, this means the military too.
Click to expand...
 
You must log in or register to reply here.
Back
Top Bottom