LOVE THAT DEBT – DETAILING THE CLINTON SURPLUS MYTH
Posted by Andrew Roman on June 9, 2010
The number is: 19,600,000,000,000.
No, it isn’t the number of times President Barack Obama uses the word “I” or “me” during the course of the work day. It isn’t the amount of times Democrats blame George W. Bush for all that is wrong in any given week. It isn’t the amount of money being spent each month on dye for Paul McCartney’s hair.
It is what the national debt of the United States will be five years from now under Obamacratic rule.
The report that was sent to lawmakers Friday night with no fanfare said the ratio of debt to the gross domestic product would rise to 102 percent by 2015 from 93 percent this year.
“The president’s economic experts say a 1 percent increase in GDP can create almost 1 million jobs, and that 1 percent is what experts think we are losing because of the debt’s massive drag on our economy,” said Republican Representative Dave Camp, who publicized the report.
He was referring to recent testimony by University of Maryland Professor Carmen Reinhart to the bipartisan fiscal commission, which was created by President Barack Obama to recommend ways to reduce the deficit, which said debt topping 90 percent of GDP could slow economic growth.
The U.S. debt has grown rapidly with the economic downturn and government spending for the Wall Street bailout, the wars in Afghanistan and Iraq and the economic stimulus. The rising debt is contributing to voter unrest ahead of the November congressional elections in which Republicans hope to regain control of Congress.
The total U.S. debt includes obligations to the Social Security retirement program and other government trust funds. The amount of debt held by investors, which include China and other countries as well as individuals and pension funds, will rise to an estimated $9.1 trillion this year from $7.5 trillion last year.
By 2015 the net public debt will rise to an estimated $14 trillion, with a ratio to GDP of 73 percent, the Treasury report said.
An exasperated blogger at Reuters, who goes by the name of johnchick, posted the following rhetorical question: “How can any Administration raise the debt by 20-30% in a couple years?”
To which another blogger responded with the following:
You should ask George Bush, Cause he was the first to do it. And he is largely the origin of the current fiscal mess that the U.S. is in. Bushie inherited a surplus from the Clinton Administration and quickly turned that into the largest yearly deficits that the U.S. has ever seen. And his Conservative ideology ruined the American Economy in the process.
The U.S. is now going the way of the DoDo.
And the world will be a better place for it.
To begin with, it’s an absolute riot to hear lefties complain about out-of-control federal spending. Most of them, given the chance, would spend more taxpayer dollars on big-government bailouts and stimulus packages. To a lefty, the failure of a liberal policy or initiative is tied directly to its funding.
George W. Bush, who might as well have been a drunken Democrat with the country’s checkbook, made no friends on the conservative side of the aisle when it came to government spending. By the time he left office in January of last year, he was able to put on his resume that he had presided over what was the biggest growth of federal spending in the nation’s history. Like all misguided Republicans, he failed because he embraced liberalism.
Right now, Barack Obama is on pace to make George Bush look like a veritable pinchfist. Obama is apparently determined to make America collapse under its own weight, just as is happening across Socialist Europe right now. At the current rate, America’s publicly held debt will hit an unbelievable 90% of the Gross Domestic Product in a decade. That would be the highest percentage since the Second World War.
The difference, however – and it is a significant one – is that the post-war economic boom contributed mightily to the dramatic fall of that debt-to-GDP ratio.
Today, it’s all about entitlements (i.e., what the government can do for you). Federal spending, as a percentage of the GDP, was nearly 25% last year – the highest in this nation’s history. (It’s projected to shoot up to near 26% this year). And even though President Bush did spend recklessly in terms of total dollars, during his first seven years in office, federal spending as a percentage of GDP was very consistent with all post-war administrations: ranging from 18.11% to 19.38%. (His final year, arguably his most fiscally liberal, it jumped to 20.65%)
It simply isn’t possible to tax ourselves out of the economic disaster that looms with Obama at the helm.
On paper, tax rates would have to be raised to economy-crushing, unheard of levels.
But in reality, no economy could survive such a thing.
It would be the end of America.
And that’s where we’re headed.
So, while no conservative will ever condone the ridiculous Democrat-like spending that went on during the Bush administration, the fact that revenues to the government did go up following the 2003 Bush tax cuts only reinforces the fact that conservative principals – when applied correctly – actually do work. Unfortunately for Bush, spending like a lib in conjunction with those tax cuts was akin to having two fully loaded double whoppers and cheese fires with a diet soda.
Libs cannot have it both ways.
If out-of-control government spending is deleterious to a healthy economy, then it doesn’t matter who is occupying the Oval Office when it happens. The argument that the economy can reach a point where the only way to cure the ills of out-of-control spending is with more out-of-control spending is Leftocrat doltism at its finest.
And let’s be perfectly clear, there was never a true surplus under President Bill Clinton.
Indeed, it flies in the face of conventional wisdom, but the numbers do not, in any way, back up such a claim.
For example, the surplus announced in 2000 – $230 billion – was really a nifty bookkeeping stunt. It was not a genuine surplus, because only the “public debt” was accounted for.
Remember, there are two components to the national debt: public debt – which includes such things as savings bonds and treasury bills – and intergovernmental holdings, which includes income tax revenues and governmental borrowing from itself.
During the last years of the Clinton administration, the public debt did go down, but intergovernmental debt increased by a greater amount.
Not once during Clinton’s time in office did the national debt decrease.
It is not possible, by definition, to have a surplus if the national debt keeps increasing.
First of all, the official Clinton “surplus” numbers, which can be seen here, via the Congressional Budget Office, are as follows:
Fiscal Year 1998 – $69.3 Billion surplus.
Fiscal Year 1999 – $125.6 Billion surplus.
Fiscal Year 2000 – $236.3 Billion surplus.
Please note that these very numbers were also reported by CNN.
Now, if you go to the Bureau of the Public Debt website, which is part of the United States Department of Treasury, you’ll find a link that reads “See the U.S. Public Debt To The Penny.” (You may need to scroll down a bit)
Once you click on that, you’ll be brought to page that gives you the current total national debt (divided into two subgroups: “Debt held by the Public” and “Intrgovernmental Holdings”) along with a search application that enables you to type in the dates of your choosing to see what the total national debt was on that given date.
The important thing to check are the FISCAL YEAR parameters. (The fiscal year always begins on October 1st and runs through the end of the following September).
For instance, if you type in “October 1, 1999″ in the first box and “September 30, 2000″ in the next box, you will be asking to see the total national debt figures for Fiscal Year 2000. You’ll note, after typing in those parameters, that if you scroll all the way to the bottom, the total debt held by the public at the end of Fiscal Year 2000 was “$3,405,303,490,221.20.” You’ll also notice that Intragovernmental Holdings total was “$2,268,874,719,665.66.”
These are official Department of Treasury numbers.
Adding those two numbers together gives you a grand total of “$5,674,178,209,886.86.”
Compare the total public debt of FY2000 to that of FY1999.
President Clinton did technically pay down the PUBLIC NATIONAL DEBT from FY1999 to FY2000.
FY1999 PUBLIC DEBT: $3,636,104,594,501.81
FY2000 PUBLIC DEBT: $3,405,303,490,221.20
It was paid down by a total of $230,801,104,280.61 – amazingly close to the announced $236 Billion surplus for that year. But it was done so by borrowing from the Social Security Trust Fund (primarily) which ran a surplus that year. The Social Security Administration is required by law to buy government securities with its surpluses (convenient, isn’t it?). That money was thus used by the government to do its business without having to get it from the public. Hence, the public debt was “paid down.”
I fully concede the point that President Clinton paid down the PUBLIC debt, but not the national debt.
Unfortunately, that $230 Billion “pay down” does not take into account Intragovernmental Holdings, which is as much part of calculating surpluses and debts as the Public Debt is.
Intragovernmental Debt ROSE in FY2000.
That’s an increase of $248,708,412,534.04
The difference between how much of the public debt was paid down compared to the growth of the Intragovernmental debt was: – $17,907,308,253.43
That means FY2000 resulted in a true deficit of almost $18 Billion under Bill Clinton.
Granted, it is miniscule compared to the yearly deficits of the Bush years and what is waiting for us with the Obama regime, but it was not a surplus.