Only two Presidents in last 50 year to reduce the deficit

I see this meme a lot on Facebook. Some questions...

1. Is it accurate?
2. Is it relevant?
3. Are there mitigating factors, either against these two or for other Presidents?

Re Clinton: Clinton had the luxury of presiding during the dot-com boom. An orangutan could have guided an economy successfully through that period. Though, to be fair, he was wise enough to let it go, and that is meant to be a compliment to him. Most politicians would not have had that restraint. Having said that, many forget that he left office with a budding recession looming.

Re Obama: The deficit was super high when he took office. The economy remained weak for awhile, and for years the deficit still did not go down. The economy did finally begin to improve, though I believe more as part of a natural cycle than anything he did. Hence, Obama benefited because the deficit had nowhere to go but down.

Basically, both men got lucky in this area. Government and overall spending still grew during both of their administrations, and that's not something to be proud of.

Re: Only two Presidents ion last 50 year to reduce the deficit

Yep, and both were demorats who performed that miracle with a republicant majority in congress - simply amazing that the POTUS gets the credit for controlling the spending which is set by congress.

Re: Only two Presidents ion last 50 year to reduce the deficit

radcen said:

I see this meme a lot on Facebook. Some questions...

1. Is it accurate?
2. Is it relevant?
3. Are there mitigating factors, either against these two or for other Presidents?

View attachment 67194788

Re Clinton: Clinton had the luxury of presiding during the dot-com boom. An orangutan could have guided an economy successfully through that period. Though, to be fair, he was wise enough to let it go, and that is meant to be a compliment to him. Most politicians would not have had that restraint. Having said that, many forget that he left office with a budding recession looming.

Re Obama: The deficit was super high when he took office. The economy remained weak for awhile, and for years the deficit still did not go down. The economy did finally begin to improve, though I believe more as part of a natural cycle than anything he did. Hence, Obama benefited because the deficit had nowhere to go but down.

Basically, both men got lucky in this area. Government and overall spending still grew during both of their administrations, and that's not something to be proud of.

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It is not very relevant, though, there is a great difference between the two. While Obama could have reduced the budget in the later part of his Presidency and probably been able to create a surplus without causing the economy to stall, Clinton could easily have reduced the debt considerably so preventing the set of bubbles we have seen in his aftermath. His neglect of the economy has actually hampered us ever since.

Re: Only two Presidents ion last 50 year to reduce the deficit

It is accurate, but extremely misleading.

Clinton both faced a Republican Congress and was riding an economic boom. So much so that there were several years of budget surpluses even though Total Debt still went up (mainly because of Intergovernmental Debt based on Social Security income.) It would be far to say that Cointon and Democrats as minority in Congress did not get all the spending they wanted. What they did get was negotiated for.

Obama on the other hand walked into economic free fall with a mess of a budget and facing spending needs with a complicit Congress for his first 2 years in office. Deficits only started to fall when the economy started to crawl out of the cellar, *and* when Republicanis took the House back causing such political gridlock that no one got the spending desires they wanted. We know that is accurate based on partial shutdowns and credit downgrades.

The only thing both cases share is the foolish notion that any President is entirely responsible on their own for any year's budget condition.

Congress should be getting more of the blame / credit for trend directions on budget conditions. Any President's budget proposal is just that, a proposal Congress ends up sorting out. That is compounded by a series of spending bills that make their way through Congress in a given year. That is further compounded by Tax policy, usually devoid of spending needs at the time.

Re: Only two Presidents ion last 50 year to reduce the deficit

radcen said:

I see this meme a lot on Facebook. Some questions...

1. Is it accurate?
2. Is it relevant?
3. Are there mitigating factors, either against these two or for other Presidents?

Click to expand...

1. No, Bush presided over a reduced federal deficit as well. Be it talking in dollars or as a percent of GDP, the deficit was reduced in 2005, 2006, and 2007.

2. Not particularly relevant, as is the case with the vast majority of political memes that try to distill something into a picture and sentence or two. For one, it doesn't really give a better explanation of what it's measuring, and as such it's possibly inaccurate as I noted above. Even if it was talking about from start to end of a Presidency, it'd still not be relevant because Obama has not actually finished yet so we can't accurately get his numbers. Furthermore, as you indicated, there's mitigation here. There's a nuanced argument as to how to consider things...for example, 2009's spending was partially from things started under Bush but were also impacted by things signed by Obama. It technically falls under Obama, but should it? There's nuance here that an idiotic meme doesn't really allow for.

Similar matters of nuance is attempting to compare all things as equal. Clinton actually ran a Budget Surplus, Obama's "reductions" are arguably benefited from historic highs at the start of his term that was spurred by spending that was clearly indicated as a "temporary" measure, and Bush's reductions were helped by the spike following 9/11 while his increase was attributed to policy issues not just by him but by his predecessors as well.

On top of all this it ignores that the President is not a King, and that congress plays a significant role as it relates to government spending, revenue generation, etc. For example, one could technically say that the only Federal Surplus of the past 50 years came under Republican control of Congress. Or you could technically say the most significant reductions in the federal deficit over the past 50 years came when Republican controlled the purse strings via the House, while the most significant increase occurred while Democrats controlled it. Both comments would be as (if not more) technically true than the meme in question, but they'd be just as hollow and pointless of a comment because it ignores a significant amount of nuance and context and implies a number of questionable facts and notions.

Re: Only two Presidents ion last 50 year to reduce the deficit

ttwtt78640 said:

Yep, and both were demorats who performed that miracle with a republicant majority in congress - simply amazing that the POTUS gets the credit for controlling the spending which is set by congress.

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For right or for wrong, it is true that the sitting President almost always ends up getting the credit and/or blame for whatever happens.

Re: Only two Presidents ion last 50 year to reduce the deficit

radcen said:

For right or for wrong, it is true that the sitting President almost always ends up getting the credit and/or blame for whatever happens.

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Yet, you don't find it odd that, during your chosen sample period, when one party controls both congress and the White House that both the federal government and its debt have grown?

Re: Only two Presidents ion last 50 year to reduce the deficit

I guess we should put this into perspective. Clinton achieved a balanced budget because the internet bubble had cause a huge increase in tax revenue. When that bubble burst, we went right back to deficit spending. Obama has simply substituted debt for a realistic budget.

Re: Only two Presidents ion last 50 year to reduce the deficit

fmw said:

I guess we should put this into perspective. Clinton achieved a balanced budget because the internet bubble had cause a huge increase in tax revenue. When that bubble burst, we went right back to deficit spending. Obama has simply substituted debt for a realistic budget.

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He also borrowed from SS, so if you consider all money in vs all money out, he didn't even balance anything. He just used Jedi mind tricks.

Re: Only two Presidents ion last 50 year to reduce the deficit

radcen said:

He also borrowed from SS, so if you consider all money in vs all money out, he didn't even balance anything. He just used Jedi mind tricks.

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"He" did not borrow anything. The Social Security Trust Fund buys special issued debt every single day as a matter of law no matter who is President, or the disposition of Congress, or the condition of the budget.

Re: Only two Presidents ion last 50 year to reduce the deficit

radcen said:

I see this meme a lot on Facebook. Some questions...

1. Is it accurate?
2. Is it relevant?
3. Are there mitigating factors, either against these two or for other Presidents?

View attachment 67194788

Re Clinton: Clinton had the luxury of presiding during the dot-com boom. An orangutan could have guided an economy successfully through that period. Though, to be fair, he was wise enough to let it go, and that is meant to be a compliment to him. Most politicians would not have had that restraint. Having said that, many forget that he left office with a budding recession looming.

Re Obama: The deficit was super high when he took office. The economy remained weak for awhile, and for years the deficit still did not go down. The economy did finally begin to improve, though I believe more as part of a natural cycle than anything he did. Hence, Obama benefited because the deficit had nowhere to go but down.

Basically, both men got lucky in this area. Government and overall spending still grew during both of their administrations, and that's not something to be proud of.

Click to expand...

republicans first time in 50 years they controlled both houses of congress for clinton

obamacare taxes kicked in , new revenue to the the IRS lowered deficit for obama

Re: Only two Presidents ion last 50 year to reduce the deficit

radcen said:

Basically, both men got lucky in this area. Government and overall spending still grew during both of their administrations, and that's not something to be proud of.

Click to expand...

As always, I have to ask - what is so great about reducing federal deficits?



Take a look at the interplay between government deficits, private sector surplus, and recessions. When the private sector goes into deficit, or just breaks even, we get recessions. And assuming our trade deficit remains, then the smaller the govt. deficit (or the larger the rare surplus), the less money the private sector gets. Most of us are at least old enough to remember the last three negative events: the Clinton Surplus and following recession; the Bush housing bubble, and the painfully slow Obama "recovery." Throughout this past 15 years, we have not had what I would call a healthy economy, yet pressure has still been put on the government to reduce the federal deficit. It was even an issue in 2008-2009, when the Fed was trying to pull our economic fanny out of the fire, because Congress would barely lift a fiscal finger (and the economy needed increased govt. spending at that moment more than anything the Fed could do).

So looking back, Clinton led us into a recession by running a small surplus; Bush, probably unwittingly, helped us out with his tax breaks and military spending, then deregulated us into the housing bubble and the resulting great recession; and Obama, I think, wanted to spend more at the outset, but was prevented from doing so by gridlock.

Re: Only two Presidents ion last 50 year to reduce the deficit

"As always, I have to ask - what is so great about reducing federal deficits?"

Deficit means more debt... which means more interest on the debt. Not as big of a deal while we have had years of artificially low interest rates... we have added 8 trillion in debt since Obama has been president however we have less interest on the debt because of the low interest rate.
If interest rates return to a 'normal' rate and we keep adding more deficit then in not too many years we could have the interest on the debt be greater than the entire revenue... at that point .. actually long before that point... doing business with other countries will be vastly harder. You could feasibly see the us dollar being dropped as the WB/IMF standard. other countries withdrawing investment etc..

Re: Only two Presidents ion last 50 year to reduce the deficit

ttwtt78640 said:

Yep, and both were demorats who performed that miracle with a republicant majority in congress - simply amazing that the POTUS gets the credit for controlling the spending which is set by congress.

Click to expand...

Unnecessary wars really are a whopper on the budget. Most Republicans don't care about that though.

Re: Only two Presidents ion last 50 year to reduce the deficit

fmw said:

I guess we should put this into perspective. Clinton achieved a balanced budget because the internet bubble had cause a huge increase in tax revenue. When that bubble burst, we went right back to deficit spending. Obama has simply substituted debt for a realistic budget.

Click to expand...

Give credit where credit is due. Bush had the housing bubble and deficeits exploded under his reign. You can't use the "dot com bubble" as an excuse. Face it, Bush was a Republican with a Republican controlled congress and Republican controlled Supreme Court. He couldn't touch Clinton's economy.

Re: Only two Presidents ion last 50 year to reduce the deficit

SocialD said:

"As always, I have to ask - what is so great about reducing federal deficits?"

Deficit means more debt... which means more interest on the debt. Not as big of a deal while we have had years of artificially low interest rates... we have added 8 trillion in debt since Obama has been president however we have less interest on the debt because of the low interest rate.

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The government creates dollars at no real cost. Treasury issues bonds, which cost nothing, and collects dollars. Sometimes, it's the Fed itself that buys the bonds, with Fed notes that cost them nothing. And interest on these bonds is paid with, you guessed it, more dollars that cost the government absolutely nothing to create. This is nothing like true debt. Sovereign governments have this power.

SocialD said:

If interest rates return to a 'normal' rate and we keep adding more deficit then in not too many years we could have the interest on the debt be greater than the entire revenue... at that point .. actually long before that point... doing business with other countries will be vastly harder.

Click to expand...

The Fed controls interest rates. And why would doing business with other countries become more difficult should our interest reach that point (not that it's anywhere near that point)?

SocialD said:

You could feasibly see the us dollar being dropped as the WB/IMF standard. other countries withdrawing investment etc..

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Not really. What currency is in better shape? What currency is better suited to being the major reserve currency than the dollar?

Re: Only two Presidents ion last 50 year to reduce the deficit

JohnfrmClevelan said:

The government creates dollars at no real cost. Treasury issues bonds, which cost nothing, and collects dollars. Sometimes, it's the Fed itself that buys the bonds, with Fed notes that cost them nothing. And interest on these bonds is paid with, you guessed it, more dollars that cost the government absolutely nothing to create. This is nothing like true debt. Sovereign governments have this power.



The Fed controls interest rates. And why would doing business with other countries become more difficult should our interest reach that point (not that it's anywhere near that point)?



Not really. What currency is in better shape? What currency is better suited to being the major reserve currency than the dollar?

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Apparently you skipped over the part where I stated that our interest on 18+ trillion dollars now is less than our interest on 10+ trillion was. That would be enough right there.. or should be enough.. to tell you that the interest rates do effect what we owe. You are speaking to Intergovernmental debt but we have sovereign/public debt and external/foreign debt. US debt held by foreign interests is 6.1 trillion. A lot of this is through trade. As the debt grows particularly as a percentage of gdp confidence to pay back those debts is diminished.
They can play the shuffle the money around with intragovernmental debt all they want and maybe even debt owed to the people but debt to someone else isn't the same.

To detail it better will reference the World Bank
Creditors first start to worry whether the country will default on the interest payments. This becomes a self-fulfilling prophecy because, as fears rise, so does the amount of interest a country must promise to pay to float new bonds. Countries must borrow at ever-more expensive rates to pay off the older, cheaper debt. If this cycle continues, the nation may be forced to default on its debt altogether. (Source: The World Bank, Finding the Tipping Point)

As for the currency, right now no other currency would do.. some are stronger but not as widely used. but that could change.
Here is an article from 5 years ago where the UN was saying the US dollar should be replaced as the world standard
Dollar should be replaced as international standard, U.N. report says - CNN.com

Re: Only two Presidents ion last 50 year to reduce the deficit

reinoe said:

Unnecessary wars really are a whopper on the budget. Most Republicans don't care about that though.

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IN the length of time it tooks us to spend a trillion on Iraq that would not have been spent even were we not at war, we spent at a minimum 30 trillion on everything else.

Re: Only two Presidents ion last 50 year to reduce the deficit

Zyphlin said:

1. No, Bush presided over a reduced federal deficit as well. Be it talking in dollars or as a percent of GDP, the deficit was reduced in 2005, 2006, and 2007.

2. Not particularly relevant, as is the case with the vast majority of political memes that try to distill something into a picture and sentence or two. For one, it doesn't really give a better explanation of what it's measuring, and as such it's possibly inaccurate as I noted above. Even if it was talking about from start to end of a Presidency, it'd still not be relevant because Obama has not actually finished yet so we can't accurately get his numbers. Furthermore, as you indicated, there's mitigation here. There's a nuanced argument as to how to consider things...for example, 2009's spending was partially from things started under Bush but were also impacted by things signed by Obama. It technically falls under Obama, but should it? There's nuance here that an idiotic meme doesn't really allow for.

Similar matters of nuance is attempting to compare all things as equal. Clinton actually ran a Budget Surplus, Obama's "reductions" are arguably benefited from historic highs at the start of his term that was spurred by spending that was clearly indicated as a "temporary" measure, and Bush's reductions were helped by the spike following 9/11 while his increase was attributed to policy issues not just by him but by his predecessors as well.

On top of all this it ignores that the President is not a King, and that congress plays a significant role as it relates to government spending, revenue generation, etc. For example, one could technically say that the only Federal Surplus of the past 50 years came under Republican control of Congress. Or you could technically say the most significant reductions in the federal deficit over the past 50 years came when Republican controlled the purse strings via the House, while the most significant increase occurred while Democrats controlled it. Both comments would be as (if not more) technically true than the meme in question, but they'd be just as hollow and pointless of a comment because it ignores a significant amount of nuance and context and implies a number of questionable facts and notions.

Click to expand...

1. This is misleading. President Bush 2 "reduced the deficit" if you mean "made the deficit go more negative" aka -2 < -1. Or if you mean that he reduced deficits from his own local peak.

2. The president actually has limited control of the economy. One of the worst things you can do is, say, deregulate the way the banking industry works to unsustainably increase economic growth so that you can get re-elected when your trickle down tax cuts are underperforming and you want to get re-elected.

Congress just approves or adjusts the budget created by the president. But feel free to gloss over the glaring hypocrisy of the political party that exploits fear-mongering of deficits and debts being far more contributory to public debt.





Further, as pointed out above, deficits aren't that bad as long as inflation stays steady and low, which it most certainly has :



What would be really damaging is to cripple the demand side of the equation by dramatically cutting social services. Further, it's pretty clear that wealth disparity slows down the economy.

Distributive Politics and Economic Growth

When a large section of the public is denied access to the productive resources of the economy, the economy is less productive. In other words, we need to make sure our poor folks can get an education.

Re: Only two Presidents ion last 50 year to reduce the deficit

SocialD said:

Apparently you skipped over the part where I stated that our interest on 18+ trillion dollars now is less than our interest on 10+ trillion was. That would be enough right there.. or should be enough.. to tell you that the interest rates do effect what we owe. You are speaking to Intergovernmental debt but we have sovereign/public debt and external/foreign debt. US debt held by foreign interests is 6.1 trillion. A lot of this is through trade. As the debt grows particularly as a percentage of gdp confidence to pay back those debts is diminished.
They can play the shuffle the money around with intragovernmental debt all they want and maybe even debt owed to the people but debt to someone else isn't the same.

Click to expand...

This has nothing to do with intragovernmental debt. (Intragovernmental debt shouldn't even count anyway. It's like your left pocket owing your right pocket money.)

There are a ton of bad (but very common) assumptions here. Debt as a percentage of GDP is one - there is no evidence that it matters one bit. Confidence in our government's ability to pay its debt? 99.9% among people who understand how governments operate - the 0.1% of uncertainty coming from our use of the debt ceiling as a political football. But our operational ability to meet our bond obligations is absolute. Past Fed chairmen have acknowledged this.

SocialD said:

To detail it better will reference the World Bank
Creditors first start to worry whether the country will default on the interest payments. This becomes a self-fulfilling prophecy because, as fears rise, so does the amount of interest a country must promise to pay to float new bonds. Countries must borrow at ever-more expensive rates to pay off the older, cheaper debt. If this cycle continues, the nation may be forced to default on its debt altogether. (Source: The World Bank, Finding the Tipping Point)

Click to expand...

Your source is simply incorrect. No nation sovereign in its own currency can be forced into default. Euro users can. And this is reflected in interest rates. The U.S., Japan, Australia, Canada, the U.K. - all pay low interest rates, because the risk of default is, basically, zero. The only actual risk is inflation. And bond traders know this. Foreign debt is a different story, but we don't carry a significant amount of foreign debt, as there is little reason to do so.

SocialD said:

As for the currency, right now no other currency would do.. some are stronger but not as widely used. but that could change.
Here is an article from 5 years ago where the UN was saying the US dollar should be replaced as the world standard
Dollar should be replaced as international standard, U.N. report says - CNN.com

Click to expand...

I imagine that calls for a new reserve currency because of value have died down, since the dollar keeps on performing well against other currencies. In any case, nobody can force the U.S. dollar from its perch. If your export economy doesn't want a piece of our huge appetite for consumption, lotsa luck to ya, because no other economy on the planet is in position to take our place. If you want your currency to be the world's reserve currency, you need to have a large, stable economy and run large trade deficits. China and Japan have export economies, and people are discovering that the euro (and the Eurozone economy) has too many built-in problems.

Part of the problem with the IMF and CNN analyses you provided is that they are using obsolete, gold-standard era economic thinking. In the gold standard days, a government's debt was very real, because they were tied to gold. That is not true anymore, but mainstream economic thought has been slow to catch up. With fiat currency, debt issuance isn't even necessary. It's a relic from the past. There is no longer any risk that bondholders won't get their gold-convertible dollars; now the only real risk is inflation. And this changes a lot of the equations.

Re: Only two Presidents ion last 50 year to reduce the deficit

Absentglare said:

1. This is misleading. President Bush 2 "reduced the deficit" if you mean "made the deficit go more negative" aka -2 < -1. Or if you mean that he reduced deficits from his own local peak.

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How about this. Click on my links, which are specifically there as a source, and then get back to me. You're just flatly wrong. In 2004 the deficit was roughly $400 billion. in 2005 it was roughly -$300 billion. In 2006 it was roughly -$250 billion. In 2007 it was roughly -$150 billion. In '05, '06, and '07 the deficit was reduced comparative to the previous year.

Now attempting to proclaim that it was due to Bush, to give him all the credit for it, to ignore the context of it, etc would be "misleading"...which my entire post flat out acknowledges. But no LESS misleading than the meme. And the question for issue one was whether the meme was correct...it's not by at least one means of measuring what it speaks about.

Furthermore, understand that "Debt" and "Deficit" are two different things. Linked in various ways, but not the same. Posting graphs that talk about debt as some kind of counter to my claim about the level of the deficit doesn't really work.

The rest of your post is just strawman prattling non-sense and nothing more. Nothing in my post was discussing whether deficits were good or not or anything like that. If you want to go beat up a strawman you're free to do it on your own, I have no intent on veering off on such non-topical nonsense to suit your desire to distract.

The question was simply whether or not that picture was accurate (it is not) or if it's relevant (it was not imho, for reasons I stated). If you want to actually address the topic and address what I've actually said, feel free. Otherwise, enjoy screwing around with your strawman.

Re: Only two Presidents ion last 50 year to reduce the deficit

reinoe said:

Give credit where credit is due. Bush had the housing bubble and deficeits exploded under his reign. You can't use the "dot com bubble" as an excuse. Face it, Bush was a Republican with a Republican controlled congress and Republican controlled Supreme Court. He couldn't touch Clinton's economy.

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My point is that economies don't belong to presidents. They neither ruin nor improve the economy. It is a matter of when they were in office, not what they did in office. The internet bubble was a positive influence on the economy. The housing one was not.

Re: Only two Presidents ion last 50 year to reduce the deficit

radcen said:

He also borrowed from SS, so if you consider all money in vs all money out, he didn't even balance anything. He just used Jedi mind tricks.

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There is no SS fund. SS payments come from the general fund and SS tax payments go into it. SS is just an accounting function. It has been that way for decades.

Re: Only two Presidents ion last 50 year to reduce the deficit

fmw said:

There is no SS fund. SS payments come from the general fund and SS tax payments go into it. SS is just an accounting function. It has been that way for decades.

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Damn close, I threw down a like on it anyway.

There is a Social Security Trust Fund, it just happens to be a giant ledger book of holdings in treasury special issued debt calculated down to the penny on a given day. You are right that it is a basic accounting function on a given day how much more is purchased to handle SS money coming in or sold to handle SS payments going out. All as a matter of law, SS has to buy debt even if the government does not need to issue it.

That is why during the Clinton budget surplus years, Total Debt still went up.

Re: Only two Presidents ion last 50 year to reduce the deficit

OrphanSlug said:

Damn close, I threw down a like on it anyway.

There is a Social Security Trust Fund, it just happens to be a giant ledger book of holdings in treasury special issued debt calculated down to the penny on a given day. You are right that it is a basic accounting function on a given day how much more is purchased to handle SS money coming in or sold to handle SS payments going out. All as a matter of law, SS has to buy debt even if the government does not need to issue it.

That is why during the Clinton budget surplus years, Total Debt still went up.

Click to expand...

Thanks. I didn't know that.