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  #1  
Old 09-06-2012, 05:35 PM
moonshot925 moonshot925 is offline
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Clinton claimed he had "four surplus budgets" at DNC speech

"People ask me all the time how we delivered four surplus budgets."

The problem is there was no surplus. The debt held by the public decreased but intergovernmental holdings increased far more. Which is why the total gross federal debt increased every fiscal year.

Here is an article which debunks the myth.

http://www.craigsteiner.us/articles/16

And here is the historical gross federal debt outstanding.

http://www.treasurydirect.gov/govt/r...t/histdebt.htm
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  #2  
Old 09-06-2012, 05:49 PM
Astral Rejection Astral Rejection is offline
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Easy answer: The key is in your question. The budget can have a surplus. The national debt is a different thing from the budget, and that surplus. A budget can come in, say, 260 billion under budget, and that 260 billion can go to paying off the national debt.

This leads us to the difficult answer: how did the debt go up when we had surpluses? As I understand it, it comes down to trust fund accounting. For instance, social security revenues have to be separated out to pay beneficiaries. It can't be spent on roads or whatever, but you can buy treasury bonds to earn interest. However, that money is now counted as debt.

I hope I got all the particulars there right. It's a confusing issue on the surface, but hopefully you can now see its not as black and white as you might have thought before.
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  #3  
Old 09-06-2012, 05:52 PM
Hentor the Barbarian Hentor the Barbarian is offline
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You should not feel too stupid. This is a common mistake if you are ignorant about these things. The deficit and the debt are very different things.

It's actually quite accurate that the federal budget was in surplus in each of the years 1998 through 2001 inclusive.

You could look it up, but I would recommend you avoid your usual sources. I think they are leading you desperately astray.
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  #4  
Old 09-06-2012, 06:01 PM
moonshot925 moonshot925 is offline
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Quote:
Originally Posted by Hentor the Barbarian View Post
You should not feel too stupid. This is a common mistake if you are ignorant about these things. The deficit and the debt are very different things.

It's actually quite accurate that the federal budget was in surplus in each of the years 1998 through 2001 inclusive.

You could look it up, but I would recommend you avoid your usual sources. I think they are leading you desperately astray.
If there was a surplus from fiscal years 1998 to 2001, why would the federal government need to barrow and increase the national debt?

09/30/1997 = 5,413,146,011,397.34

09/30/1998 = 5,526,193,008,897.62

09/30/1999 = 5,656,270,901,615.43

09/30/2000 = 5,674,178,209,886.86

09/30/2001 = 5,807,463,412,200.06

Last edited by moonshot925; 09-06-2012 at 06:02 PM..
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  #5  
Old 09-06-2012, 06:09 PM
Linden Arden Linden Arden is offline
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Originally Posted by moonshot925 View Post
If there was a surplus from fiscal years 1998 to 2001, why would the federal government need to barrow and increase the national debt?

09/30/1997 = 5,413,146,011,397.34

09/30/1998 = 5,526,193,008,897.62

09/30/1999 = 5,656,270,901,615.43

09/30/2000 = 5,674,178,209,886.86

09/30/2001 = 5,807,463,412,200.06
Because by law Social Security SURPLUS taxes (FICA) must be invested in US Treasuries.

If we had a FICA payment surplus of $2 trillion then $2 trillion in Treasuries must be purchased. The other side of the ledger is the $2 trillion in cash the for the general fund (which you ignore). The better the FICA surplus the more debt is sold by Treasury.

So Clinton did in fact run surpluses (at least two iirc).
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  #6  
Old 09-06-2012, 06:17 PM
jtgain jtgain is offline
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Only in Washington is an overall increase in the debt a "surplus." Social Security was always supposed to be separate from general revenues. If you take that out of the equation, we ran a deficit.

We only had a surplus if you count the revenue from social security, but ignore the debt issued in treasuries.
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  #7  
Old 09-06-2012, 06:20 PM
Ravenman Ravenman is offline
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Sorry, conservatives, you can't argue your way around Accounting 101. An asset in the Social Security Trust Fund is a liability to the US Government. Get over it.
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  #8  
Old 09-06-2012, 06:24 PM
Linden Arden Linden Arden is offline
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Originally Posted by Ravenman View Post
Sorry, conservatives, you can't argue your way around Accounting 101. An asset in the Social Security Trust Fund is a liability to the US Government. Get over it.
Conservatives don't understand double entry accounting since the Medici invented it and they are "European".
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  #9  
Old 09-06-2012, 06:30 PM
Linden Arden Linden Arden is offline
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Originally Posted by jtgain View Post
Social Security was always supposed to be separate from general revenues.
It is.

But the SS Trust Fund cannot keep cash lying around that generates no income so they invest in Treasuries that yield 1-5%.

The SS Trust Fund is the largest owner of US Treasuries by far.

http://www.ssa.gov/OACT/ProgData/fyOps.html

$2.8 trillion in 2010 (see table).
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  #10  
Old 09-06-2012, 06:30 PM
aceplace57 aceplace57 is offline
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Clinton was Arkansas' governor for a long time. Ark has a balanced budget requirement. Clinton had lots of experience operating my state under a budget. He took that experience to Washington.

Last edited by aceplace57; 09-06-2012 at 06:31 PM..
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  #11  
Old 09-06-2012, 06:32 PM
Ravenman Ravenman is offline
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It still flabbergasts me that someone would see:

1) The public debt being paid off
2) The size of the Social Security Trust Fund growing by very large amounts

and conclude that this is destroying our country!!
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  #12  
Old 09-06-2012, 06:36 PM
Exapno Mapcase Exapno Mapcase is offline
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Quote:
Originally Posted by Ravenman View Post
It still flabbergasts me that someone would see:

1) The public debt being paid off
2) The size of the Social Security Trust Fund growing by very large amounts

and conclude that this is destroying our country!!
Easy.

The Untold Story Of How Clinton's Budget Destroyed The American Economy.

So it's deficits from here on in.
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  #13  
Old 09-06-2012, 06:36 PM
aldiboronti aldiboronti is offline
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I don't really see Clinton's point anyway, unless he's just blowing his own trumpet. His administrations are history, it's Obama's record that this election will be won or lost on.
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  #14  
Old 09-06-2012, 06:41 PM
Linden Arden Linden Arden is offline
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Originally Posted by Exapno Mapcase View Post
That article is complete nonsense. It blames the huge Bush/Obama deficits of over $1 trillion on Freddie and Fannie.

But F/F only cost the Treasury $160 billion since Hank Paulson put them into US receivership. And their bonds still pay FULL COUPON.

What about the other $7 trillion in debt Bush racked up with his policies?

Gasparino is a Fox News hack - paid to lie like Hannity is.
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  #15  
Old 09-06-2012, 06:43 PM
Jas09 Jas09 is offline
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Originally Posted by aldiboronti View Post
I don't really see Clinton's point anyway, unless he's just blowing his own trumpet. His administrations are history, it's Obama's record that this election will be won or lost on.
His point immediately followed his rhetorical question. That the only way you balance a budget is "arithmetic". And that Romney's arithmetic doesn't add up (you can't tax cut and defense spend your way to a balanced budget), while a plan that includes revenue and spending cuts, like the President's, does.
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  #16  
Old 09-06-2012, 07:04 PM
moonshot925 moonshot925 is offline
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These liberal arguments FAIL.

The money the government "owes itself" (intragovernmental holdings) is still debt.

Social Security used its revenue to purchase treasury securities as it is required to do, but just because it is the government that did the purchasing does not mean it is not real debt. The SS money was already "spoken for" in that it is owed to the entitlees in the general public. You have a lender (Social Security Trust Fund), a borrower (the Treasury), interest due, and consequences on default. That certainly sounds a lot like debt.

Anyway, I think my point still stands: if the sum-total amount of money owed did not go down, there could not have been a surplus.

Last edited by moonshot925; 09-06-2012 at 07:04 PM..
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  #17  
Old 09-06-2012, 07:08 PM
Astral Rejection Astral Rejection is offline
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Well, okay. We tried. Pack it in, guys.
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  #18  
Old 09-06-2012, 07:17 PM
Omg a Black Conservative Omg a Black Conservative is offline
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Originally Posted by moonshot925 View Post
The money the government "owes itself" (intragovernmental holdings) is still debt.
Trust me. You're not the first person to point out during Clinton's years that while the public debt went down intragovernmental holdings went more than the public debt. Unfortunately, it never seems to register with some of the posters here. It's more-or-less a lost cause.
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  #19  
Old 09-06-2012, 07:24 PM
Hentor the Barbarian Hentor the Barbarian is offline
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Arithmetic.
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  #20  
Old 09-06-2012, 07:29 PM
Linden Arden Linden Arden is offline
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Originally Posted by Omg a Black Conservative View Post
Trust me. You're not the first person to point out during Clinton's years that while the public debt went down intragovernmental holdings went more than the public debt. Unfortunately, it never seems to register with some of the posters here. It's more-or-less a lost cause.
More nonsense.

Let me propose some more basic terms:

During the later Clinton years TAX RECEIPTS surpassed federal spending. Mix it anyway you wish.

I can prove this all day long.
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  #21  
Old 09-06-2012, 07:53 PM
Astral Rejection Astral Rejection is offline
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OMG, moonshot... You guys know "how accounting works" isn't a liberal plot to trick you, right? That's just how it works.
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  #22  
Old 09-06-2012, 07:55 PM
moonshot925 moonshot925 is offline
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Quote:
Originally Posted by Linden Arden View Post
More nonsense.

Let me propose some more basic terms:

During the later Clinton years TAX RECEIPTS surpassed federal spending. Mix it anyway you wish.

I can prove this all day long.
This is where you are mistaken. Not all of the trust fund surplus money was used to reduce the public debt. Some of it was used in normal government operations. For example in FY 2000 the government received $248.7 billion in extra trust fund income but only spent $230.8 billion of that on reducing the public debt. The remaining $17.9 billion was spent and represents a deficit (which is why the national debt increased by $17.9 billion in FY 2000).

Last edited by moonshot925; 09-06-2012 at 07:56 PM..
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  #23  
Old 09-06-2012, 07:56 PM
Ravenman Ravenman is offline
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So, conservatives are upset when the Social Security Trust Fund runs surpluses, because it means more government debt. Conservatives are upset that some day, the Social Security Trust Fund may run deficits, because that proves it is a Ponzi Scheme.

Why should we listen to any conservative commentary on Social Security matters when the whole debate is a "heads the GOP wins, tails the country loses" pointless exercise?
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  #24  
Old 09-06-2012, 08:01 PM
Omg a Black Conservative Omg a Black Conservative is offline
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Originally Posted by Linden Arden View Post
More nonsense.

Let me propose some more basic terms:

During the later Clinton years TAX RECEIPTS surpassed federal spending. Mix it anyway you wish.

I can prove this all day long.
Good luck.

(Yeah, if people can get to quote from left-leaning sites, I get quote from right-leaning sites.)

ETA: I'd actually like to hear how you could run a surplus while increasing the national debt, unless you're defining surplus in some weird type of way.

Last edited by Omg a Black Conservative; 09-06-2012 at 08:04 PM..
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  #25  
Old 09-06-2012, 08:08 PM
moonshot925 moonshot925 is offline
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Quote:
Originally Posted by Ravenman View Post
So, conservatives are upset when the Social Security Trust Fund runs surpluses, because it means more government debt. Conservatives are upset that some day, the Social Security Trust Fund may run deficits, because that proves it is a Ponzi Scheme.

Why should we listen to any conservative commentary on Social Security matters when the whole debate is a "heads the GOP wins, tails the country loses" pointless exercise?
We upset when the politicians squander part of the trust fund extra income which leads to an increase in the national debt and then claim they had a "surplus".

If all of the extra money coming from trust funds had been used to pay down the public debt, intragovernmental debt would have increased by the same amount that public debt decreased--and it would have resulted in no change to the total national debt. It would be balance (but still not a surplus).

Last edited by moonshot925; 09-06-2012 at 08:10 PM..
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  #26  
Old 09-06-2012, 08:13 PM
Linden Arden Linden Arden is offline
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Originally Posted by Omg a Black Conservative View Post
Good luck.

(Yeah, if people can get to quote from left-leaning sites, I get quote from right-leaning sites.)

ETA: I'd actually like to hear how you could run a surplus while increasing the national debt, unless you're defining surplus in some weird type of way.
Your link supports my claims:

Quote:

The Social Security Administration is legally required to take all its surpluses and buy U.S. Government securities, and the U.S. Government readily sells those securities--which automatically and immediately becomes intragovernmental holdings. The economy was doing well due to the dot-com bubble and people were earning a lot of money and paying a lot into Social Security. Since Social Security had more money coming in than it had to pay in benefits to retired persons, all that extra money was immediately used to buy U.S. Government securities. The government was still running deficits, but since there was so much money coming from excess Social Security contributions there was no need to borrow more money directly from the public. As such, the public debt went down while intragovernmental holdings continued to skyrocket.
I never claimed that debt was paid down. I only claimed that surplus existed. The two are independent phenomena.

(Bold excepted)


http://www.factcheck.org/2008/02/the...under-clinton/
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  #27  
Old 09-06-2012, 08:24 PM
Ravenman Ravenman is offline
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Originally Posted by moonshot925 View Post
We upset when the politicians squander part of the trust fund extra income which leads to an increase in the national debt and then claim they had a "surplus".

If all of the extra money coming from trust funds had been used to pay down the public debt, intragovernmental debt would have increased by the same amount that public debt decreased--and it would have resulted in no change to the total national debt. It would be balance (but still not a surplus).
I can understand your frustration with the public debt being paid off and the Social Security Trust Funds growing, when no Republican president has ever come close to accomplishing the same thing in the last 50 years. It must really burn.
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  #28  
Old 09-06-2012, 08:27 PM
Omg a Black Conservative Omg a Black Conservative is offline
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Originally Posted by Linden Arden View Post
Your link supports my claims:



I never claimed that debt was paid down. I only claimed that surplus existed. The two are independent phenomena.

(Bold excepted)


http://www.factcheck.org/2008/02/the...under-clinton/
As moonshot925 pointed out-- not even focusing on running a surplus-- if the deficit would have been balanced you would have expected a decrease in the public debt to match an increase in intragovernmental holdings. But you do not; you see intragovernmental holdings increase by a much larger amount than the public debt decreases, thus leading to an increase in the national debt, meaning that you cannot possibly be running a budget surplus. This has to be Accounting 101.

By the way, it's deathly apparent that:

1.) You didn't read my initial post or

2.) You didn't read your own link.

In my initial post I said, and I quote, "[y]ou're not the first person to point out during Clinton's years that while the public debt went down intragovernmental holdings went more than the public debt"-- something you referred to as "nonsense", even though it's an EASILY checkable fact. Not only that, but your link makes the exact same error that's common.

I mean, really. What do you think intragovernmental holdings are? It's money that the government borrows from trust funds. It has to be paid back. You can't somehow discount it in its entirety and then claim that you're running a surplus because you have less public debt when, in fact, you have more total debt.

Last edited by Omg a Black Conservative; 09-06-2012 at 08:28 PM..
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  #29  
Old 09-06-2012, 08:35 PM
BrainGlutton BrainGlutton is offline
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Originally Posted by moonshot925 View Post
"People ask me all the time how we delivered four surplus budgets."

The problem is there was no surplus. The debt held by the public decreased but intergovernmental holdings increased far more. Which is why the total gross federal debt increased every fiscal year.

Here is an article which debunks the myth.

http://www.craigsteiner.us/articles/16
TVTropes is an authoritative source on economics (by comparison to Craig Steiner):

Quote:
8. America the bankrupt: National debts don't work like your personal debt. For example, people don't buy your debt to prop up your currency. Yet for some reason a lot of writers tend to think of the national debt in the same terms as a bank loan, with angry creditors and everything. When this trope is invoked expect to see a consortium of angry foreign dignitaries banging on a conference table that they want their money back. In reality, if countries actually acted like this, the global financial system would probably collapse pretty spectacularly and everyone would be screwed. This trope is not specific to America, but for some reason Americans are exceptionally paranoid about the National Debt, particularly when the Chinese are buying it up, and now not buying it anymore. Oddly enough, America's National Debt isn't even that bad by international standards. Also, the US national debt is in terms of dollars, and the government can create as many dollars as they need to pay off the debt. Everyone would be paid the amount owed, but the new dollars would lead to inflation. The key here is that governments usually owe substantial portions of their debt to 'themselves,' i.e. either the government owes money to different branches, or those branches hold their assets as bonds and treasury bills instead of money; by owing money to yourself, you usually don't charge yourself interest (beyond inflation) and you theoretically can't default on money you owe yourself. This is how Japan can have gross debt worth over 100% of their yearly economic output and have little economic effects: 70-80% of its debt is owned by the Japanese Central Bank. In the United States, around 35-40% of the government debt is owed to itself, mainly to the Social Security Administration. Also, debt owned to foreign entities makes up MUCH less of the debt than people seem to think: as an example, China owns only 6% of the total US debt.

Last edited by BrainGlutton; 09-06-2012 at 08:36 PM..
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  #30  
Old 09-06-2012, 08:40 PM
moonshot925 moonshot925 is offline
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Originally Posted by Linden Arden View Post
I never claimed that debt was paid down. I only claimed that surplus existed. The two are independent phenomena.
If there was a real budget surplus the national debt would have been reduced. In fiscal years 1947, 1948, 1951, 1956 and 1957 there was a budget surplus and the national debt was reduced. Those were real surpluses.

Not a single real surplus during the Clinton Administration. The deficit was significantly reduced but it was never erased.

In fiscal year 2000 a $237 billion surplus was claimed while the national debt increased by $18 billion. That is ridiculous. If you had such a large surplus in the hundreds of billions you wouldn't need to barrow.
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  #31  
Old 09-06-2012, 08:43 PM
Ravenman Ravenman is offline
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Originally Posted by Omg a Black Conservative View Post
As moonshot925 pointed out-- not even focusing on running a surplus-- if the deficit would have been balanced you would have expected a decrease in the public debt to match an increase in intragovernmental holdings.
Public debt going down, Social Security Trust Fund going up. This aggression cannot stand; we must cut taxes!

ETA: did you two oppose the 2001 Bush tax cuts, which were intended to return the surplus to the taxpayers?

Last edited by Ravenman; 09-06-2012 at 08:46 PM..
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  #32  
Old 09-06-2012, 08:49 PM
Linden Arden Linden Arden is offline
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Originally Posted by Omg a Black Conservative View Post
As moonshot925 pointed out-- not even focusing on running a surplus-- if the deficit would have been balanced you would have expected a decrease in the public debt to match an increase in intragovernmental holdings. But you do not; you see intragovernmental holdings increase by a much larger amount than the public debt decreases, thus leading to an increase in the national debt, meaning that you cannot possibly be running a budget surplus. This has to be Accounting 101.
The part you are missing is the cash account of the general fund. How large did it grow to by 2000?

You are focused on the debt outstanding. That is only 1/2 the picture.

The debt limit stood still for five years 1997-2001 while cash increased.

http://www.fas.org/sgp/crs/misc/RL31967.pdf

(table one)

This is proof that surpluses existed then - since the debt limit has been increased in each year since then.

Last edited by Linden Arden; 09-06-2012 at 08:50 PM..
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  #33  
Old 09-06-2012, 08:51 PM
BrainGlutton BrainGlutton is offline
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Originally Posted by moonshot925 View Post
If there was a real budget surplus the national debt would have been reduced.
No, that's not how it works

Let's dumb this down to the personal-finances level, if that's what it takes: You get a bonus in your paycheck, you might spend it to pay down your credit card balance, or you might spend it on strippers and cocaine, that's a decision you have to make -- but the bonus is the same either way.

Last edited by BrainGlutton; 09-06-2012 at 08:52 PM..
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  #34  
Old 09-06-2012, 08:58 PM
Linden Arden Linden Arden is offline
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Same source:

Quote:

After FY1992, deficits shrank, and from FY1998 through FY2001 the federal government ran surpluses.
Four years - as Clinton claimed.
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  #35  
Old 09-06-2012, 09:05 PM
moonshot925 moonshot925 is offline
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Quote:
Originally Posted by BrainGlutton View Post
No, that's not how it works

Let's dumb this down to the personal-finances level, if that's what it takes: You get a bonus in your paycheck, you might spend it to pay down your credit card balance, or you might spend it on strippers and cocaine, that's a decision you have to make -- but the bonus is the same either way.
If the government had a surplus and spent it on anything other than paying down the national debt, there was no longer a surplus the moment the money was spent on something else.
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  #36  
Old 09-06-2012, 09:09 PM
Hentor the Barbarian Hentor the Barbarian is offline
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Guys, this is just one of those things about which you're going to face a mass conspiracy. In fact, in order to prevent yourself from falling prey, I recommend tin foil.
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  #37  
Old 09-06-2012, 09:10 PM
Ludovic Ludovic is offline
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Originally Posted by Ravenman View Post
Public debt going down, Social Security Trust Fund going up. This aggression cannot stand; we must cut taxes!
At least they saved us from our long national nightmare of peace and prosperity.
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  #38  
Old 09-06-2012, 09:13 PM
tim314 tim314 is offline
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Originally Posted by Omg a Black Conservative View Post
ETA: I'd actually like to hear how you could run a surplus while increasing the national debt, unless you're defining surplus in some weird type of way.
I think this is just some confusion in terms. Here is my layman's understanding:

There's a surplus if the government takes in more money than it spends. If the opposite occurs, it's a deficit. The words "surplus" and "deficit" mean just what we probably all expect them to mean.

However, "the national debt" does not mean the sum of all accumulated surplus minus all accumulated deficits. (This goes contrary to what a lot of us would expect it to mean.) It means the total amount the government would need to pay to pay back all the money it has borrowed, including when one part of the government borrows from another.

For simplicity suppose there was neither a surplus nor a deficit. The total amount of money flowing in to the government was exactly the same as the amount flowing out. However, some Social Security money was invested in government bonds -- this means the Social Security fund has loaned money to the General Fund (because that's what buying bonds is, it's a loan you make to the government). That increases the "intragovernmental" component of the debt, but it doesn't imply that there was a deficit. The money didn't cross from "within the government" to "outside the government", it just moved from one part of the government to another.

I suppose Conservatives are trying to argue that a surplus where FICA contributions are what puts the government ahead is somehow not as good as a surplus where the non-Social Security part of the government was already coming out ahead on its own. You can make that argument if you want, but regardless, it is still true that there was an overall net surplus. Bill Clinton was telling the truth about that.
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  #39  
Old 09-06-2012, 09:14 PM
Patty O'Furniture Patty O'Furniture is offline
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Overdrawn? How can that be? I still have more checks!
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  #40  
Old 09-06-2012, 09:27 PM
moonshot925 moonshot925 is offline
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The deficit should be calculated by the amount that the national debt increased in the fiscal year.

Don't trust the CBO numbers, they are bogus and I will explain why.

Every year the "official" claimed deficit is smaller than the amount by which the national debt went up. This is true under both Republican and Democrat presidents.

Here are some examples:

In FY 1987 a $149.730 billion deficit was claimed while the national debt increased by $224.974 billion.

In FY 1996 a $21.884 billion deficit as claimed while the national debt increased by $188.335 billion.

In FY 2000 a $236.241 billion surplus was claimed while the national debt increased by $17.907 billion.

In FY 2008 a $454.806 billion deficit was claimed while the national debt increased by $1,017.072 billion.

As you can see, the claimed deficit numbers are always MUCH lower than the amount the national debt increased. Which is why they are false.

Last edited by moonshot925; 09-06-2012 at 09:28 PM..
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  #41  
Old 09-06-2012, 09:35 PM
Ravenman Ravenman is offline
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Originally Posted by moonshot925 View Post
Every year the "official" claimed deficit is smaller than the amount by which the national debt went up....

As you can see, the claimed deficit numbers are always MUCH lower than the amount the national debt increased. Which is why they are false.
Once more: for every asset in the Social Security Trust Fund, there is a liability for the US Government. In other words, for every liability in the intragovernmental debt, there is an asset in a trust fund.

And I repeat: did you oppose the Bush tax cuts because they were intended to return the surplus to the taxpayers?
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  #42  
Old 09-06-2012, 09:40 PM
tim314 tim314 is offline
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Originally Posted by moonshot925 View Post
The deficit should be calculated by the amount that the national debt increased in the fiscal year.
Regardless of how you think it should be calculated, that's not how it's calculated. The deficit is the difference between spending and revenue.

The debt on the other hand includes intragovernmental debt. One part of the government owes money to another part of the government. You can accumulate intragovernmental debt even if the total government revenue is equal to or greater than the total spending.

You seem to be saying "Those terms should not be defined that way." Regardless, though, they are defined that way.

Last edited by tim314; 09-06-2012 at 09:41 PM..
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Old 09-06-2012, 09:48 PM
moonshot925 moonshot925 is offline
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Originally Posted by Ravenman View Post
Once more: for every asset in the Social Security Trust Fund, there is a liability for the US Government. In other words, for every liability in the intragovernmental debt, there is an asset in a trust fund.

And I repeat: did you oppose the Bush tax cuts because they were intended to return the surplus to the taxpayers?
I opposed them because it was not a good time to cut taxes.
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Old 09-06-2012, 10:03 PM
moonshot925 moonshot925 is offline
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Originally Posted by tim314 View Post
Regardless of how you think it should be calculated, that's not how it's calculated. The deficit is the difference between spending and revenue.

The debt on the other hand includes intragovernmental debt. One part of the government owes money to another part of the government. You can accumulate intragovernmental debt even if the total government revenue is equal to or greater than the total spending.

You seem to be saying "Those terms should not be defined that way." Regardless, though, they are defined that way.
Those junk numbers are used by Washington to hide how fiscally irresponsible they have been with your money. Inaccurate and misleading.

If the federal government only had a $455 billion deficit in FY 2008, why did it need to barrow over $1 trillion that year?
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Old 09-06-2012, 10:13 PM
Ravenman Ravenman is offline
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Originally Posted by moonshot925 View Post
I opposed them because it was not a good time to cut taxes.
And so you oppose R-Money's tax cuts too, right?
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  #46  
Old 09-06-2012, 10:13 PM
jtgain jtgain is offline
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Originally Posted by Ravenman View Post
Once more: for every asset in the Social Security Trust Fund, there is a liability for the US Government. In other words, for every liability in the intragovernmental debt, there is an asset in a trust fund.
We've done this in threads before, and yes, Enron-style accounting works this way.

If I have a $20 bill in my pocket and spend it, but make sure to write myself and IOU for $20, under your theory, I would still have $20 because my IOU (to myself) is an asset. But where would I get $20 to pay myself back? Through work or investment income: Exactly the same way that I would get $20 without the IOU.

In the same vein, the government treasury bonds that the SS trust fund holds as an "asset" must be paid back by either borrowing more money or taking in tax revenue. Which is the same way it would be funded without the treasury bond.

You can split anything into separate accounts, create balance sheets for each and show how one is doing great. But if they are all functionally the same entity (i.e. The US Government) then it's absurd to use such a method.

Tell me how the "assets" in the SS Trust Fund are any different than the trust fund having absolutely nothing there. A promise to repay yourself is not an asset. Even if you are an honest, upright citizen who really WILL repay yourself.
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Old 09-06-2012, 10:22 PM
Snarky_Kong Snarky_Kong is offline
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It's "borrow" by the way.
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Old 09-06-2012, 10:22 PM
Ludovic Ludovic is offline
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Originally Posted by jtgain View Post
Tell me how the "assets" in the SS Trust Fund are any different than the trust fund having absolutely nothing there. A promise to repay yourself is not an asset. Even if you are an honest, upright citizen who really WILL repay yourself.
But the same people who squeal about the U.S. having 16 trillion in debt also want to count it as a major crisis when Social Security runs a deficit. That shouldn't impact the 16 trillion in debt at all, until the trust fund runs out. Just more of the debt will be shifted to the public. It's sort of like the old "but what happened to the extra $1?" riddle.
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Old 09-06-2012, 10:23 PM
Ravenman Ravenman is offline
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Originally Posted by jtgain View Post
We've done this in threads before, and yes, Enron-style accounting works this way.

If I have a $20 bill in my pocket and spend it, but make sure to write myself and IOU for $20, under your theory, I would still have $20 because my IOU (to myself) is an asset. But where would I get $20 to pay myself back? Through work or investment income: Exactly the same way that I would get $20 without the IOU.

In the same vein, the government treasury bonds that the SS trust fund holds as an "asset" must be paid back by either borrowing more money or taking in tax revenue. Which is the same way it would be funded without the treasury bond.

You can split anything into separate accounts, create balance sheets for each and show how one is doing great. But if they are all functionally the same entity (i.e. The US Government) then it's absurd to use such a method.

Tell me how the "assets" in the SS Trust Fund are any different than the trust fund having absolutely nothing there. A promise to repay yourself is not an asset. Even if you are an honest, upright citizen who really WILL repay yourself.
Because the highest law in the land guarantees that the bonds must be paid. Enron can declare bankruptcy and screw it's creditors. The United States Government is constitutionally prohibited from ever doing such a thing.

Is that a good enough reason for you?
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Old 09-06-2012, 10:31 PM
Robot Arm Robot Arm is online now
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Quote:
Originally Posted by jtgain View Post
If I have a $20 bill in my pocket and spend it, but make sure to write myself and IOU for $20, under your theory, I would still have $20 because my IOU (to myself) is an asset. But where would I get $20 to pay myself back? Through work or investment income: Exactly the same way that I would get $20 without the IOU.
So what would you call that, a $20 deficit, break even, or a $20 surplus? When you write an IOU, the person who receives it can count it as an asset, and you should keep track of it as a debt.

You started with $20. You end with whatever thing you spent the $20 on, an IOU worth $20, and an obligation to pay $20. I would say you broke even.

If I'm following this all correctly, moonshot and OMG are trying to call this a $20 deficit. The debt is $20, and they're not accepting that the government (in a different account) now holds an asset worth $20 that it didn't have at the beginning.

Would someone let me know if that's remotely close?
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