“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.
And here is the historical gross federal debt outstanding.
http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt.htm
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.
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
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).
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.
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”.
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).
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.
It still flabbergasts me that someone would see:
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.
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.
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.
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.
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.
Well, okay. We tried. Pack it in, guys.
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.
Arithmetic.
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.