# Clinton claimed he had "four surplus budgets" at DNC speech **URL:** \ **Category:** Politics & Elections\ **Created:** [September 6, 2012, 10:35pm UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918 "2012-09-06T22:35:43Z")\ **Posts on this page:** 20\ **Page:** 10
**Author:** ![lance\_strongarm](https://avatars.discourse-cdn.com/v4/letter/l/87869e/32.png) [@lance\_strongarm](https://boards.straightdope.com/u/lance_strongarm)\ **Post date:** [September 10, 2012, 8:06pm UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/181 "2012-09-10T20:06:42Z")
> [@moonshot925](#): > > I have found figures for federal funds surpluses/deficits. Federal funds are all funds except for trust funds. These are the figures that should be used because they most accurately show the surplus/deficit in the general operating budget. > > Federal Funds Surplus or Deficit(–) in millions of dollars: > > FY 1994 = –298,571 > FY 1995 = –263,231 > FY 1996 = –222,091 > FY 1997 = –147,897 > FY 1998 = –91,981 > FY 1999 = –87,164 > FY 2000 = 1,836 > FY 2001 = –101,422 > > [http://www.gpo.gov/fdsys/pkg/BUDGET-2004-TAB/pdf/BUDGET-2004-TAB-3-4.pdf](http://www.gpo.gov/fdsys/pkg/BUDGET-2004-TAB/pdf/BUDGET-2004-TAB-3-4.pdf) > > As you can see, Clinton had 7 deficits and a tiny surplus in FY 2000. I believe these numbers have been revised. This source has the latest numbers: [http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/hist.pdf](http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/hist.pdf) ---
**Author:** ![LinusK](https://avatars.discourse-cdn.com/v4/letter/l/258eb7/32.png) [@LinusK](https://boards.straightdope.com/u/LinusK)\ **Post date:** [September 10, 2012, 8:11pm UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/182 "2012-09-10T20:11:52Z")
> [@Sam\_Stone](#): > > Instead of ‘petty cash’, let’s pretend that you gave the IOU to ‘Tony the Leg Breaker’, and in return he gave you the $10. > > Would your conclusion be that since you now have $100, and you spent $100, that your fiscal situation hasn’t changed? What would happen if your bank asked for your financial situation, and you claimed that you were running a balanced household budget, neglecting to inform the bank of your monthly loan from Tony the Leg Breaker, because you consider that to be ‘off-budget’? > > What do you think would happen to you if you signed a legal document to that effect, defaulted on your loan, and then the bank discovered that you failed to disclose your other liabilities? > > And what do you think Tony is going to do to you? > > Now, getting back to petty cash. Let’s say that’s your retirement fund, and you keep borrowing from it and putting IOU’s in it. Your theory is that this isn’t really ‘debt’, because you’re borrowing from yourself. But what exactly do you expect will happen when you try to retire? > > This is exactly analagous to the situation the U.S. faces. There WILL be millions of baby boomers retiring in the next decade. They WILL expect to collect their full retirement benefits. A jar full of IOU’s doesn’t pay squat. So the government will be forced to do one of three things: Cut program spending dramatically, raise taxes dramatically, or cut retirement benefits. > > The problem is that the government misleads itself and the public about the nature of this problem, so it has raised its own spending and the level of promises it’s making to eat up all revenue plus any additional taxes it can feasibly raise in the political environment. This means when the crunch happens, it’s going to be very hard to do any of those things. So it’ll probably do the fourth thing: Try to borrow the money and push the problem into the future. And the nature of this problem is so huge over time that that is an unsustainable course and WILL lead to a dramatic financial crisis at some time in the future. > > If businesses today believe that the crisis could come within their long-term planning window, they will cut back on investment and costs, and start saving money. I believe that’s exactly what’s happening today, and there’s plenty of research that agrees with me. If that’s the case, then the more you borrow for ‘stimulus’, the more the economy will contract because businesses see the borrowing as more risk and more future taxes, and it’s coming soon enough that they have to plan for it. > > The only thing that can hope to restore a healthy economy is to take steps necessary to ensure investors that the economy is on a stable footing and that there isn’t a fiscal cliff coming or massive new tax increases coming. Anything else is just tinkering while Rome burns. You’re confusing two different things here: the borrowing and the spending. If I have 100 income and 90 expenses I have a 10 surplus. If I go to Tony the Legbreaker for a 10 loan, _ **I still have a 10 surplus** _. The surplus doesn’t disappear until or unless I spend another 10.\*\*\* But it’s not the borrowing that makes the surplus disappear; it’s the spending.\*\*\* You’re also wrong about the stimulus, but that’s a different topic. ---
**Author:** ![moonshot925](https://avatars.discourse-cdn.com/v4/letter/m/f0a364/32.png) [@moonshot925](https://boards.straightdope.com/u/moonshot925)\ **Post date:** [September 10, 2012, 8:42pm UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/183 "2012-09-10T20:42:58Z")
> [@lance\_strongarm](#): > > I believe these numbers have been revised. > > This source has the latest numbers: > > [http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/hist.pdf](http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/hist.pdf) The source you linked to has figures for the unified budget which includes trust fund surpluses. It it dishonest. The unified budget disguises just how far in the red our government has been going each year. The problem with the Unified Surplus is that it counts earmarked surpluses as money that can be spent for general purposes. For example, the money Social Security invests in treasury securities is needed to fund the retirement of Baby Boomers. ---
**Author:** ![j666](https://avatars.discourse-cdn.com/v4/letter/j/9de0a6/32.png) [@j666](https://boards.straightdope.com/u/j666)\ **Post date:** [September 10, 2012, 11:48pm UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/184 "2012-09-10T23:48:09Z")
**moonshot,** do you _listen_ to yourself? Can you appreciate how you have consistently moved the goalpost in your attempt to score? > [@moonshot925](#): > > Because **Clinton cooked the books** and many people were duped. It is clear to anyone capable of addition and subtraction that Clinton didn’t have surplus because the debt increased every year. But for some reason the lie is still repeated. Fraud. > [@moonshot925](#): > > Here is what happened in FY 2000 > > The US federal government general fund had a deficit of $17.907 billion, which means that outlays exceeded receipts by that much. > > $248.708 billion was borrowed from trust funds and other federal funds. > > The public debt was paid down by $230.801 billion. > > But the remaining $17.907 not used to pay down the public debt was needed to finance the general fund deficit. > > **Clinton** was a very smart man and managed to fool the majority of Americans with his **accounting gimmick**. Gimmick, not fraud. > [@moonshot925](#): > > You are correct. Carter, Reagan, Bush I, Clinton, Bush II and Obama have used this gimmick to hide the real size of their deficits. > > But **Clinton is a special case** because he is the only one to claim surpluses when in reality the general fund had a deficit. It spent more than it recived in revenue. > > Surpluses that did not exist. Long standing practice, but it only matters that Clinton did it. > [@moonshot925](#): > > President Clinton is not the one who started the accounting fraud that the government uses, it was actually **President Johnson**. > … Now, I don’t have my calculator, but wasn’t that nearly _ **half a freaking century ago?** _ Do you see what you did? You started off accusing the former President of a crime - kind of like perjury when there was no court involve, almost - and back peddled until you were voicing a perfectly valid - if not exactly bleeding edge - economic argument _but people still think you’re a nitwit._ Why couldn’t you start a perfectly rational thread about government accounting practices? I might have learned a bit more about budgets and accounting, or at least not have wasted four pages of my life trying to figure out a detail that makes no damned difference in my life. Everyone - **everyone** - knows the government accounting practices are not the same as business practices. Everyone knows that SS is going upside down. Some people even understand the difference between the national debt and national public debt. And so do I now. But it doesn’t make one bit of difference - I still have to be thrifty and clever and not live too long. But you just couldn’t stand that Clinton did a good job. [Can I say ‘nitwit’?] ---
**Author:** ![Zakalwe](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/zakalwe/32/270_2.png) [@Zakalwe](https://boards.straightdope.com/u/Zakalwe)\ **Post date:** [September 10, 2012, 11:55pm UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/185 "2012-09-10T23:55:48Z")
Okay, so you’ve got an airplane and a GIANT treadmill… No, wait. That’s not right, you’ve got .9999(repeating) of something… Dammit. Hang on…I’ve got it. Right, so your son is two days old and the circumcision debate is the topic on the radio as you’re driving your hybrid SUV running over bicyclists on the way to the clean coal plant to buy a wind turbine with your gold standard dollars… Okay, to hell with it. Seriously, this is starting to look like another one of those “religious” arguments where both sides are going to dig in. Is there any possibility of just agreeing to disagree? No? Okay, I didn’t think so, but felt I had to try. ---
**Author:** ![lance\_strongarm](https://avatars.discourse-cdn.com/v4/letter/l/87869e/32.png) [@lance\_strongarm](https://boards.straightdope.com/u/lance_strongarm)\ **Post date:** [September 11, 2012, 1:16am UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/186 "2012-09-11T01:16:03Z")
> [@LinusK](#): > > You’re confusing two different things here: the borrowing and the spending. > > If I have 100 income and 90 expenses I have a 10 surplus. If I go to Tony the Legbreaker for a 10 loan, _ **I still have a 10 surplus** _. The surplus doesn’t disappear until or unless I spend another 10.\*\*\* But it’s not the borrowing that makes the surplus disappear; it’s the spending.\*\*\* Wait a minute, what spending? You only spent 90. ---
**Author:** ![lance\_strongarm](https://avatars.discourse-cdn.com/v4/letter/l/87869e/32.png) [@lance\_strongarm](https://boards.straightdope.com/u/lance_strongarm)\ **Post date:** [September 11, 2012, 1:17am UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/187 "2012-09-11T01:17:27Z")
> [@moonshot925](#): > > Because Clinton cooked the books and many people were duped. It is clear to anyone capable of addition and subtraction that Clinton didn’t have surplus because the debt increased every year. But for some reason the lie is still repeated. No, the debt did NOT increase. That is the source of your confusion. ---
**Author:** ![j666](https://avatars.discourse-cdn.com/v4/letter/j/9de0a6/32.png) [@j666](https://boards.straightdope.com/u/j666)\ **Post date:** [September 11, 2012, 2:43am UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/188 "2012-09-11T02:43:12Z")
> [@lance\_strongarm](#): > > Wait a minute, what spending? You only spent 90. That’s why he still has the surplus. This thread hasn’t brought up the cost of servicing debt, yet. If you go to Charles the Legbreaker to borrow ten dollars, you don’t have a surplus, because as soon as you take that money, you owe him twenty. I don’t believe government bonds are getting that rate these days, but interest is an issue. ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [September 11, 2012, 3:07am UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/189 "2012-09-11T03:07:57Z")
> [@LinusK](#): > > You’re confusing two different things here: the borrowing and the spending. I’m not confusing a damned thing. I have no idea why this is so hard for you to get. > [@](#): > > If I have 100 income and 90 expenses I have a 10 surplus. If I go to Tony the Legbreaker for a 10 loan, _ **I still have a 10 surplus** _. The surplus doesn’t disappear until or unless I spend another 10.\*\*\* But it’s not the borrowing that makes the surplus disappear; it’s the spending.\*\*\* Are you trying to be intentionally misleading? Of course it’s not the borrowing that makes the surplus disappear. My point is that it would be WRONG to treat the money you borrowed as ‘income’ for the purpose of determining whether you are running a fiscally sound budget. I will try this one more time, although I suspect I’m banging my head against a brick wall here. Let’s take an analogy that is much closer to what’s going on: Let’s say I’m a worker who makes $1000 per month, clear. I’m also looking after my mother’s retirement - she gives me $300 per month, and in return when she retires I will pay her $500 per month until she dies. I have calculated that $300 per month will cover her liability if I invest it. Now, a month goes by. I earn my $1000, but I discover that I’ve racked up $1200 in bills. I’m running a household deficit of $200. But wait - I’ve got the $300 from Mom, and she won’t be retiring for years. So I take $200 of it, use it to pay my rent, and I write an IOU and stick it in a box labeled “Mom’s retirement”. Now, what is the best description of this situation? 1. My finances are fine. Hell, I’m running a surplus! I make $1,000, plus I get $300 from mom, and my expenses are only $1200. As for Mom, she’s got $300 as promised, because the IOU I put in her fund is an asset just like the money was. Being a stand-up guy, I even added $2 in interest to the IOU. So everything’s good, and I can continue spending at this rate with no consequences. 2. The $1000 I earn is the only money I should be thinking about when it comes time to evaluate my budget, because Mom’s money is ‘off the table’. So, I took in $1000, and spent $1200. I ran a household deficit of $200, and I need to change either my spending habits or increase my income, or eventually I’ll be in big trouble. The answer is obviously #2, and it doesn’t matter whether I corrected the short-term imbalance by borrowing from Mom (‘myself’), or from a bank or Tony the Leg Breaker. If my actuarial analysis of what mom’s retirement will cost me is correct, that $200 has to be repaid, with interest. If I don’t, Mom WILL be homeless. The government tells you #1 is correct. It also tells Mom that she’s fine. The government includes the revenue from Social Security when putting out the public deficit number. And it also tells Social Security contributors that their money is safe in a ‘trust fund’ and will be there for them when they retire. Both cannot be true. And consider what will happen to me if I don’t put that money back in Mom’s account: The day she retires, suddenly I not only lose the $300/mo she was giving me, but I have to figure out how to come up with the $500/mo I promised her. So I’m actually getting an $800/mo cut in available revenue, and my monthly spending power will decrease from $1300 to $500. When that happens, if I’m still spending $1300 per month, I’m going to be in a world of hurt really fast. That’s where the U.S. is heading, because soon it will not only lose the Social Security ‘surplus’ that it has been using to fund current general expenses, but it will also have to pay for the retirement of all those baby boomers. It’s a double whammy, and it’s coming soon. Now, to bring the analogy home, let’s say that instead of cutting my spending, I decide to borrow the $200 from my neighbors. Does that make my budget balanced? Clearly not. It just means I’m borrowing money to cover my spending habits. But wait! Why borrow from the neighbors at 5% interest, and then take Mom’s money and invest it elsewhere at 3%? That makes no sense. So instead, I’ll just borrow it from Mom, and save the 2%. That’s smart. But does it change the fact that I’m still running a household deficit of $200? Hell no. And Mom’s still going to starve when she retires, because an IOU from me is only exchangeable with my own funds, and well, I won’t have enough. Sucks to be Mom. She screwed up: She trusted me. > [@](#): > > You’re also wrong about the stimulus, but that’s a different topic. Yes, it is a different topic. So why did you bring it up? Just to take a cheap shot? To stake a claim in a thread where you know you wouldn’t have to defend it? ---
**Author:** ![moonshot925](https://avatars.discourse-cdn.com/v4/letter/m/f0a364/32.png) [@moonshot925](https://boards.straightdope.com/u/moonshot925)\ **Post date:** [September 11, 2012, 3:11am UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/190 "2012-09-11T03:11:45Z")
The general operating budget had a deficit every year under Clinton except fiscal year 2000. In that year it had a tiny surplus. Receipts, Outlays and Surplus/Deficit (-) in millions of dollars: FY 1994 Receipts = 775,027 Outlays = 1,060,929 Surplus/Deficit (-) = -298,571 FY 1995 Receipts = 838,831 Outlays = 1,102,062 Surplus/Deficit (-) = -263,231 FY 1996 Receipts = 917,134 Outlays = 1,139,225 Surplus/Deficit (-) = -222,091 FY 1997 Receipts = 1,010,315 Outlays = 1,158,212 Surplus/Deficit (-) = -147,897 FY 1998 Receipts = 1,113,467 Outlays = 1,205,448 Surplus/Deficit (-) = -91,981 FY 1999 Receipts = 1,164,384 Outlays = 1,251,548 Surplus/Deficit (-) = -87,164 FY 2000 Receipts = 1,325,755 Outlays = 1,323,919 Surplus/Deficit (-) = 1,836 FY 2001 Receipts = 1,256,504 Outlays = 1,357,926 Surplus/Deficit (-) = –101,422 > **[BUDGET-2004-TAB-3-4.pdf](https://www.govinfo.gov/content/pkg/BUDGET-2004-TAB/pdf/BUDGET-2004-TAB-3-4.pdf)** > > 81.74 KB ---
**Author:** ![Jas09](https://avatars.discourse-cdn.com/v4/letter/j/d07c76/32.png) [@Jas09](https://boards.straightdope.com/u/Jas09)\ **Post date:** [September 11, 2012, 12:23pm UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/191 "2012-09-11T12:23:04Z")
It’s like the whole conversation just passed you by, moonshot. The column that counts, from a governmental budget process perspective, is Total not Federal Funds. Nobody here who understands what’s going on is decieved, or thinks that SS doesn’t have its own budgetary issues. But by the accounting rules established by law Clinton is absolutely correct to claim 4 years of budgetary surplus. Sam, we have seen similar analogies before, and they always are flawed by the fact that an individual is not a government. Not to mention that your example has one retiree in a pension system rather than millions in retirement insurance system. Do you think that insurance companies don’t count current year premiums as income (potentially offsetting other business losses) just because they are to cover future claims? ---
**Author:** ![lance\_strongarm](https://avatars.discourse-cdn.com/v4/letter/l/87869e/32.png) [@lance\_strongarm](https://boards.straightdope.com/u/lance_strongarm)\ **Post date:** [September 11, 2012, 12:27pm UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/192 "2012-09-11T12:27:38Z")
> [@Frylock](#): > > I am assuming you know this is exactly what I was suggesting in my final paragraph. I’ve heard from you and **stratocaster** now that this is an actual problem whether you call it a debt or not. > > I’m wondering if the other side of the dispute in this thread agrees with that assessment. If so, I’d say we’ve taken a small step toward clarity on the issue. If not then I’m interested in hearing why they don’t agree with the assessment. I’ve lost track of whose side is what, but I’d say yes, it’s an actual problem whether you call it debt or not. In addition, calling it debt when it isn’t only makes understanding and solving the problem harder. We should focus on solving our big problems instead of trying to score minor political points against a president who has been out of office for 12 years. ---
**Author:** ![lance\_strongarm](https://avatars.discourse-cdn.com/v4/letter/l/87869e/32.png) [@lance\_strongarm](https://boards.straightdope.com/u/lance_strongarm)\ **Post date:** [September 11, 2012, 12:30pm UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/193 "2012-09-11T12:30:40Z")
> [@j666](#): > > This thread hasn’t brought up the cost of servicing debt, yet. If you go to Charles the Legbreaker to borrow ten dollars, you don’t have a surplus, because as soon as you take that money, you owe him twenty. No! You have a surplus. Debt payable in the future doesn’t count against that. A surplus/deficit is for the current year only. Debt and deficit are not the same thing. Yes, debt service is a big problem. It is not the same thing as not having a surplus. Don’t confuse things again! ---
**Author:** ![lance\_strongarm](https://avatars.discourse-cdn.com/v4/letter/l/87869e/32.png) [@lance\_strongarm](https://boards.straightdope.com/u/lance_strongarm)\ **Post date:** [September 11, 2012, 12:34pm UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/194 "2012-09-11T12:34:12Z")
> [@moonshot925](#): > > The source you linked to has figures for the unified budget which includes trust fund surpluses. It it dishonest. The source I linked to is the same one you linked to! It’s just updated. It contains both an “on-budget” and “off-budget” column. It shows a surplus in both on- and off-budget accounts in 1999 and 2000. ---
**Author:** ![lance\_strongarm](https://avatars.discourse-cdn.com/v4/letter/l/87869e/32.png) [@lance\_strongarm](https://boards.straightdope.com/u/lance_strongarm)\ **Post date:** [September 11, 2012, 12:35pm UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/195 "2012-09-11T12:35:31Z")
> [@moonshot925](#): > > The general operating budget had a deficit every year under Clinton except fiscal year 2000. In that year it had a tiny surplus. As I noted, your numbers are out of date. There was a general operating budget surplus in 1999 too. ---
**Author:** ![lance\_strongarm](https://avatars.discourse-cdn.com/v4/letter/l/87869e/32.png) [@lance\_strongarm](https://boards.straightdope.com/u/lance_strongarm)\ **Post date:** [September 11, 2012, 12:38pm UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/196 "2012-09-11T12:38:23Z")
> [@Sam\_Stone](#): > > I will try this one more time, although I suspect I’m banging my head against a brick wall here. Let’s take an analogy that is much closer to what’s going on: > > Let’s say I’m a worker who makes $1000 per month, clear. I’m also looking after my mother’s retirement - she gives me $300 per month, and in return when she retires I will pay her $500 per month until she dies. I have calculated that $300 per month will cover her liability if I invest it. > > Now, a month goes by. I earn my $1000, but I discover that I’ve racked up $1200 in bills. I’m running a household deficit of $200. But wait - I’ve got the $300 from Mom, and she won’t be retiring for years. So I take $200 of it, use it to pay my rent, and I write an IOU and stick it in a box labeled “Mom’s retirement”. > > Now, what is the best description of this situation? That’s a decent analogy. Except it’s NOT what happened in 1999 and 2000. In 1999 and 2000, you earned your $1,000, and your expenses were $950. ---
**Author:** ![LinusK](https://avatars.discourse-cdn.com/v4/letter/l/258eb7/32.png) [@LinusK](https://boards.straightdope.com/u/LinusK)\ **Post date:** [September 11, 2012, 3:11pm UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/197 "2012-09-11T15:11:29Z")
> [@Sam\_Stone](#): > > I’m not confusing a damned thing. I have no idea why this is so hard for you to get. > > Are you trying to be intentionally misleading? Of course it’s not the borrowing that makes the surplus disappear. My point is that it would be WRONG to treat the money you borrowed as ‘income’ for the purpose of determining whether you are running a fiscally sound budget. > > I will try this one more time, although I suspect I’m banging my head against a brick wall here. Let’s take an analogy that is much closer to what’s going on: > > Let’s say I’m a worker who makes $1000 per month, clear. I’m also looking after my mother’s retirement - she gives me $300 per month, and in return when she retires I will pay her $500 per month until she dies. I have calculated that $300 per month will cover her liability if I invest it. > > Now, a month goes by. I earn my $1000, but I discover that I’ve racked up $1200 in bills. I’m running a household deficit of $200. But wait - I’ve got the $300 from Mom, and she won’t be retiring for years. So I take $200 of it, use it to pay my rent, and I write an IOU and stick it in a box labeled “Mom’s retirement”. > > Now, what is the best description of this situation? > > 1. My finances are fine. Hell, I’m running a surplus! I make $1,000, plus I get $300 from mom, and my expenses are only $1200. As for Mom, she’s got $300 as promised, because the IOU I put in her fund is an asset just like the money was. Being a stand-up guy, I even added $2 in interest to the IOU. So everything’s good, and I can continue spending at this rate with no consequences. > > 2. The $1000 I earn is the only money I should be thinking about when it comes time to evaluate my budget, because Mom’s money is ‘off the table’. So, I took in $1000, and spent $1200. I ran a household deficit of $200, and I need to change either my spending habits or increase my income, or eventually I’ll be in big trouble. > > The answer is obviously #2, and it doesn’t matter whether I corrected the short-term imbalance by borrowing from Mom (‘myself’), or from a bank or Tony the Leg Breaker. If my actuarial analysis of what mom’s retirement will cost me is correct, that $200 has to be repaid, with interest. If I don’t, Mom WILL be homeless. > > The government tells you #1 is correct. It also tells Mom that she’s fine. The government includes the revenue from Social Security when putting out the public deficit number. And it also tells Social Security contributors that their money is safe in a ‘trust fund’ and will be there for them when they retire. Both cannot be true. > > And consider what will happen to me if I don’t put that money back in Mom’s account: The day she retires, suddenly I not only lose the $300/mo she was giving me, but I have to figure out how to come up with the $500/mo I promised her. So I’m actually getting an $800/mo cut in available revenue, and my monthly spending power will decrease from $1300 to $500. When that happens, if I’m still spending $1300 per month, I’m going to be in a world of hurt really fast. > > That’s where the U.S. is heading, because soon it will not only lose the Social Security ‘surplus’ that it has been using to fund current general expenses, but it will also have to pay for the retirement of all those baby boomers. It’s a double whammy, and it’s coming soon. > > Now, to bring the analogy home, let’s say that instead of cutting my spending, I decide to borrow the $200 from my neighbors. Does that make my budget balanced? Clearly not. It just means I’m borrowing money to cover my spending habits. But wait! Why borrow from the neighbors at 5% interest, and then take Mom’s money and invest it elsewhere at 3%? That makes no sense. So instead, I’ll just borrow it from Mom, and save the 2%. That’s smart. But does it change the fact that I’m still running a household deficit of $200? Hell no. And Mom’s still going to starve when she retires, because an IOU from me is only exchangeable with my own funds, and well, I won’t have enough. Sucks to be Mom. She screwed up: She trusted me. > > Yes, it is a different topic. So why did you bring it up? Just to take a cheap shot? To stake a claim in a thread where you know you wouldn’t have to defend it? I didn’t bring it up, you did. The problem with your scenario is that the money from your mom is like a loan. Or maybe an annuity. Payroll taxes are not loans or annuities. SS is a pay as you go program. The money goes to current beneficiaries. The bigger problem is: Individuals can set aside money and spend it later. But a society as a whole can’t do that. Suppose we all wanted to save up money and retire. Suppose we set aside vast mountains of money, and then everyone stopped working. No matter how much money we set aside, the amount we can consume is limited by the number of people working. If no one is working, the mountain of money is worthless. If half of the population sets aside mountains of money, then retires, the problem is still the same. If only half as many people are working, they can produce only half as much stuff. It doesn’t matter how much money is set aside. In fact, setting aside money actually makes the problem worse, because you have that much more money chasing the goods and services the remaining half of the population is able to produce. In other words, how much we’re able to consume depends on how much stuff we have, not how much money there is. ---
**Author:** ![moonshot925](https://avatars.discourse-cdn.com/v4/letter/m/f0a364/32.png) [@moonshot925](https://boards.straightdope.com/u/moonshot925)\ **Post date:** [September 11, 2012, 3:59pm UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/198 "2012-09-11T15:59:16Z")
> [@Jas09](#): > > It’s like the whole conversation just passed you by, moonshot. The column that counts, from a governmental budget process perspective, is Total not Federal Funds. The federal funds surplus/deficit figures are the best because they show real federal revenue and outlays. The total or “unified budget” figures mask the size of the real federal deficit by including trust funds. When combined with the nontrust fund deficits, the trust fund surpluses produce a unified budget total that masks the true severity of the deficit on the nontrust fund side of the government’s operations. For example, in fiscal year 1999 the general operating (federal funds) budget had a $87.164 billion deficit, but trust funds had a $212.727 billion surplus. So Clinton subtracted the general operating deficit from the trust fund surplus to get a unified budget surplus of $125.563 billion. There’s also a local-level term for that … co-mingling trust funds. If local officials try that, to balance their operating budgets, they go to jail. Why do we tolerate it at the federal level? ---
**Author:** ![moonshot925](https://avatars.discourse-cdn.com/v4/letter/m/f0a364/32.png) [@moonshot925](https://boards.straightdope.com/u/moonshot925)\ **Post date:** [September 11, 2012, 4:07pm UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/199 "2012-09-11T16:07:06Z")
> [@lance\_strongarm](#): > > As I noted, your numbers are out of date. There was a general operating budget surplus in 1999 too. My numbers are not out of date. They properly separate the general operating budget (federal funds) and trust funds. The problem with the numbers you use is the on-budget figures don’t exclude all the trust funds. They only exclude the Social Security trust funds and operations of the US Postal Service. There are over 150 federal trust funds and they all need to be excluded in order to get the general operating budget surplus/deficit. ---
**Author:** ![lance\_strongarm](https://avatars.discourse-cdn.com/v4/letter/l/87869e/32.png) [@lance\_strongarm](https://boards.straightdope.com/u/lance_strongarm)\ **Post date:** [September 11, 2012, 4:09pm UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/200 "2012-09-11T16:09:50Z")
> [@moonshot925](#): > > For example, in fiscal year 1999 the general operating (federal funds) budget had a $87.164 billion deficit You are still using outdated figures. The general fund had a surplus that year, as in 2000. > [@](#): > > but trust funds had a $212.727 billion surplus. So Clinton subtracted the general operating deficit from the trust fund surplus to get a unified budget surplus of $125.563 billion. \*Clinton \*didn’t do that. [Previous page](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918.md?page=9) [Next page](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918.md?page=11)