# 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:** 6
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [September 8, 2012, 1:08am UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/101 "2012-09-08T01:08:13Z")
> [@tim314](#): > > More money went into your pants than came out! How is that a deficit? Hush. You are a Siamese twin, so your left pocket belongs to a different person than your right pocket. ---
**Author:** ![jshore](https://avatars.discourse-cdn.com/v4/letter/j/b5e925/32.png) [@jshore](https://boards.straightdope.com/u/jshore)\ **Post date:** [September 8, 2012, 1:26am UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/102 "2012-09-08T01:26:40Z")
This thread seems to be confirming the basic problem that Clinton identified involving Republicans and arithmetic. ---
**Author:** ![Linden\_Arden](https://avatars.discourse-cdn.com/v4/letter/l/53a042/32.png) [@Linden\_Arden](https://boards.straightdope.com/u/Linden_Arden)\ **Post date:** [September 8, 2012, 1:29am UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/103 "2012-09-08T01:29:30Z")
> [@jshore](#): > > This thread seems to be confirming the basic problem that Clinton identified involving Republicans and arithmetic. Arithmetic, like facts, have a liberal bias. It just FEELS like Clinton stole money from the SST Fund. ---
**Author:** ![jshore](https://avatars.discourse-cdn.com/v4/letter/j/b5e925/32.png) [@jshore](https://boards.straightdope.com/u/jshore)\ **Post date:** [September 8, 2012, 1:39am UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/104 "2012-09-08T01:39:37Z")
To be less flippant here, look **moonshot925** : In the four years noted, the federal budget as a whole was in surplus because the federal government took in more money than it spent. However, if you look more closely at the numbers, it is true that in (I think all but one of) these years, the budget excluding social security was in deficit but the social security system was running such large surpluses that these surpluses were larger than the deficit for the budget excluding social security. So, clearly, the statement that Clinton made was not factually-inaccurate. Yes, he didn’t go into a detailed breakdown of the budget, but what he stated as a summary was a correct summary of the federal budget as a whole. Furthermore, even if you want to look at things excluding social security, the budget situation was much better in the last 4 years of Clinton than it had been before or has been since. When there are people like Ryan making out-and-out lies, the fact that you are arguing semantic points here just shows how desperate conservatives are to find equivalence in dishonesty where none exists. It is pretty much an advertisement for the honesty gap between the parties in the U.S. that you are forced to start threads like this. ---
**Author:** ![Leaper](https://avatars.discourse-cdn.com/v4/letter/l/4bbf92/32.png) [@Leaper](https://boards.straightdope.com/u/Leaper)\ **Post date:** [September 8, 2012, 1:53am UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/105 "2012-09-08T01:53:22Z")
> [@tim314](#): > > More money went into your pants than came out! That’s what she said. ---
**Author:** ![LinusK](https://avatars.discourse-cdn.com/v4/letter/l/258eb7/32.png) [@LinusK](https://boards.straightdope.com/u/LinusK)\ **Post date:** [September 8, 2012, 4:10am UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/106 "2012-09-08T04:10:26Z")
> [@BrainGlutton](#): > > [TVTropes](http://tvtropes.org/pmwiki/pmwiki.php/UsefulNotes/Economics) is an authoritative source on economics (by comparison to Craig Steiner): > > 1. 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. Very interesting. There is one wrong thing, though. When governments print money to pay their debt, it does not cause inflation. The article itself points out that Japan’s bought up 70 or 80% of its own debt - but inflation in Japan is nonexistent. Our central bank’s purchased a couple of trillion in the last few years - without inflation. The inflation, if any, is created when the financial instruments are created, not when the government buys them back for itself. Even then, you won’t expect inflation if there’s excess unemployment. Also, the answer to the OP’s problem is that when the government borrows from itself only one of two things can happen: 1. Its assets go up by the exact same amount as its new liabilities, or 2. Nothing whatsoever changes. I favor 2, because to me the whole concept of owing money to yourself is ridiculous. (Write an IOU to yourself. Now give it to yourself. Are you richer or poorer?) But if you’re going to go by 1, you’ve got to count both sides of the ledger. The assets gained by the trust fund go up _by the exact same amount_ as the increase in the debt. Down to the penny. They balance each other perfectly. The government is no richer or poorer than when it started. ---
**Author:** ![LinusK](https://avatars.discourse-cdn.com/v4/letter/l/258eb7/32.png) [@LinusK](https://boards.straightdope.com/u/LinusK)\ **Post date:** [September 8, 2012, 4:30am UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/107 "2012-09-08T04:30:58Z")
> [@moonshot925](#): > > 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. They’re not false. What you’ll find if you check is that the difference between the public debt and the national debt is exactly the same as the amount of new assets in the Trust Fund. ---
**Author:** ![LinusK](https://avatars.discourse-cdn.com/v4/letter/l/258eb7/32.png) [@LinusK](https://boards.straightdope.com/u/LinusK)\ **Post date:** [September 8, 2012, 4:52am UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/108 "2012-09-08T04:52:41Z")
> [@Robot\_Arm](#): > > 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? Yes that’s it exactly. They want to claim the debt is real, but the asset is worthless. If they’re trying to say the Trust fund is an illusion, they’re right about that. But then the part of the debt that is the part that’s owed to the Trust Fund is also an illusion. It’s true that if in the future the government wants to increase spending it must either tax or borrow more or print more money. But that’s true whether there’s a trust fund or not. If the value of a note you wrote to yourself is zero, then the amount you owe to yourself is zero too. ---
**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 8, 2012, 5:56am UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/109 "2012-09-08T05:56:22Z")
It’s pretty simple. The U.S. government chose to take social security ‘off budget’ a long long time ago. But there are shenanigans involved. For a long, long time, social security has been taking more in in taxes than it pays out. The rest is supposed to be the surplus that goes into the trust fund to pay for future benefits, because the demographics are such that eventually the taxpayer to retiree ratio will fall to the point where Social Security will be running annual deficits, and will have to draw on its trust fund to stay solvent. In reality, there is no ‘trust fund’, so what will happen is that instead of the government collecting more in Social Security than it spends and using the rest to mask the structural deficit, it will have to take money out of general revenues and use it to pay off current retirees. Then the deficit numbers will look much worse. At that point, I expect politicians will ‘suddenly’ realize that social security payouts shouldn’t be counted as part of the deficit. If Social Security was truly off-budget, then the deficit number we all hear about would have nothing at all to do with social security. The deficit number is supposed to be a value that tells us if government is spending within its means. But the government plays a trick here - it takes the surplus in Social Security and treats it as if it’s revenue available to pay for government services. This makes the deficit look smaller and gives an implication that government spending is sustainable when in fact it’s just borrowing from the future. For example, in 1998 the government had on-budget revenue of 1.306 trillion dollars. The government budget spent 1.336 trillion dollars. Therefore, there was a structural deficit of 29.9 billion dollars. This is the best number to use, as it shows exactly what the relationship is between spending and revenue. It shows how much spending was planned for all federal government activities, and how much money was raised to pay for that spending. However, the government then takes social security off-budget, sort-of. In that year, social security took in 415.8 billion in revenue, and paid out 316.6 billion, leaving a surplus of 99.2 billion. So far, it’s all good. It’s a decent picture of government spending - the government spent more than it taxed for the purpose of running the day to day government, and it took in more than it paid out in social security, with the remainder to be part of the ‘trust fund’ held for future claimants. But what politicians have historically done is to take the surplus generated by social security and apply it to the deficit, so they could announce a smaller deficit or a surplus that really isn’t. This is dishonest, and all presidents have done it since 1937. One of the reasons the U.S. is in the whole it finds itself in is because the government has essentially lied to the people by counting social security money twice: they trumpet the surpluses to show that the ‘trust fund’ is solvent, and then they take that surplus and use it to show that the deficit is smaller than it really is. One of the reasons the deficits look so much worse now is because that trick is losing its power. At its peak, the social security system generated 183 billion in surplus. Today, it’s down to 67 billion, and by 2017 it’s estimated to be 22 billion. The prime beneficiary of this budget trickery was George W. Bush, because his presidency presided over the peak of the baby boom’s earning years and before many of them had retired. For example, here are Clinton’s last four deficits/surpluses. The first column is without counting the social security surplus, and the second applies the surplus to the structural deficit to hide it: ```auto Year Total Surplus On-Budget Surplus 1998 69.27 -29.925 1999 125.6 1.920 2000 236.241 86.422 2001 128.236 -32.445 Total: 559.357 25.972 ``` So, if social security were truly off budget, the second column would be the best estimate of Clinton’ s true fiscal management of the budget. It’s actually a really good record, with a net surplus over those four years. However, Clinton’s claim that there were four surpluses is only true if you include the social security surplus. The difference between the two values is 533.385 billion. So Clinton’s overall deficit number should be considered to be that much worse than what Clinton himself says it was. Now let’s look at George W Bush’s next four years: ```auto Year Total Deficit On-Budget Deficit 2002 -157.75 -317.417 2003 -377.58 -538.418 2004 -412.727 -567.56 2005 -318.346 -493.61 Total: 1.266T 1.917T ``` The difference between the total and on-budget deficits is 651 billion, and that’s how much worse George Bush’s numbers should look compared to what he claimed. He benefited from the social security surplus by about 118 billion dollars more than did Clinton. What is true is that Bush’s first four years contributed 1.917 trillion to the debt, while Bill Clinton’s last four actually paid the debt down by about 26 billion dollars. Source data here: [OMB Historical Budget Tables](http://www.whitehouse.gov/omb/budget/Historicals) So while Bill Clinton’s claim is factually wrong, in spirit it is correct - he did preside over an overall balanced budget over his last four years. WHY he did, and why Bush’s numbers are so much worse, is another debate. ---
**Author:** ![moonshot925](https://avatars.discourse-cdn.com/v4/letter/m/f0a364/32.png) [@moonshot925](https://boards.straightdope.com/u/moonshot925)\ **Post date:** [September 8, 2012, 11:17am UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/110 "2012-09-08T11:17:38Z")
**Sam Stone** correctly pointed out that Clinton did not have 4 surpluses when you exclude the Social Security surpluses. But a very important point is being missed. While Social Security is the only off-budget trust fund, it’s not the only trust fund. Just as surpluses caused by Social Security should not be considered a real surplus caused by a president’s budget, nor should surpluses caused by other trust funds be considered. If you go to Table 6 Schedule D of the Final Monthly Treasury Statement for FY 2000 you will see a total trust fund surplus of $246.5 billion for FY 2000. [http://fms.treas.gov/mts/mts0900.pdf](http://fms.treas.gov/mts/mts0900.pdf) An off-budget surplus increases intra-governmental debt. Off-budget surpluses are increased levels of spending that must be paid back. So borrowing money from the trust fund to pay down the public debt is simply paying one credit card off with another. ---
**Author:** ![moonshot925](https://avatars.discourse-cdn.com/v4/letter/m/f0a364/32.png) [@moonshot925](https://boards.straightdope.com/u/moonshot925)\ **Post date:** [September 8, 2012, 11:19am UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/111 "2012-09-08T11:19:22Z")
So Clinton did indeed have a deficit every year. No surplus. ---
**Author:** ![tim314](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tim314/32/3468_2.png) [@tim314](https://boards.straightdope.com/u/tim314)\ **Post date:** [September 8, 2012, 12:01pm UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/112 "2012-09-08T12:01:08Z")
I don’t think anyone in this thread has claimed that Clinton would still have had a surplus if you excluded the money coming in for social security. In fact I said way back in post #38: > [@me](#): > > 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. What we’ve all been saying is that when you weight total revenue (including FICA contributions and everything) against total expenditures, Clinton had a surplus. You’ve been arguing that the intragovernmental debt somehow cancels this out. I take it now you’ve decided to abandon this argument and instead focus on the point that the general fund treated on its own was running a deficit? ---
**Author:** ![Linden\_Arden](https://avatars.discourse-cdn.com/v4/letter/l/53a042/32.png) [@Linden\_Arden](https://boards.straightdope.com/u/Linden_Arden)\ **Post date:** [September 8, 2012, 12:48pm UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/113 "2012-09-08T12:48:25Z")
> [@](#): > > Clinton’s large budget surpluses also owe much to the Social Security tax on payrolls. Social Security taxes now bring in more than the cost of current benefits, and the “Social Security surplus” makes the total deficit or surplus figures look better than they would if Social Security wasn’t counted. \*\*But even if we remove Social Security from the equation, there was a surplus of $1.9 billion in fiscal 1999 and $86.4 billion in fiscal 2000. \*\*So any way you count it, the federal budget was balanced and the deficit was erased, if only for a while. > **[The Budget and Deficit Under Clinton - FactCheck.org](https://www.factcheck.org/2008/02/the-budget-and-deficit-under-clinton/)** > > Q: During the Clinton administration was the federal budget balanced? Was the federal deficit erased? A: Yes to both questions, whether you count Social Security or not. FULL ANSWER This chart, based on historical figures from the nonpartisan... ---
**Author:** ![moonshot925](https://avatars.discourse-cdn.com/v4/letter/m/f0a364/32.png) [@moonshot925](https://boards.straightdope.com/u/moonshot925)\ **Post date:** [September 8, 2012, 1:13pm UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/114 "2012-09-08T13:13:20Z")
Yes. The general operating budgets ran deficits every year. In FY 2000 $246.5 billion was borrowed from trust funds. A $230 billion surplus was claimed that year (which is the amount that the public debt was reduced). So there was actually a $16.5 billion deficit. ---
**Author:** ![moonshot925](https://avatars.discourse-cdn.com/v4/letter/m/f0a364/32.png) [@moonshot925](https://boards.straightdope.com/u/moonshot925)\ **Post date:** [September 8, 2012, 1:31pm UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/115 "2012-09-08T13:31:39Z")
> [@linden arden](#): > > but even if we remove social security from the equation, there was a surplus of $1.9 billion in fiscal 1999 and $86.4 billion in fiscal 2000 **Social Security is not the only trust fund.** Here is what was borrowed from trust funds in FY 2000 Social Security = $152.3 billion Civil Service Retirement Fund = $30.9 billion Federal supplementary medical insurance Trust fund = $18.5 billion Federal Hospital Insurance Trust Fund = $15.0 billion Unemployment Trust Fund = $9.0 billion Military Retirement Fund = $8.2 billion Transportation Trust Funds = $3.8 billion Employee life insurance & retirement = $1.8 billion Other = $7.0 billion Total = $246.5 billion [http://fms.treas.gov/mts/mts0900.pdf](http://fms.treas.gov/mts/mts0900.pdf) Just as surpluses caused by Social Security should not be considered a real surplus caused by a president’s budget, nor should surpluses caused by other trust funds be considered. ---
**Author:** ![jshore](https://avatars.discourse-cdn.com/v4/letter/j/b5e925/32.png) [@jshore](https://boards.straightdope.com/u/jshore)\ **Post date:** [September 8, 2012, 2:00pm UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/116 "2012-09-08T14:00:48Z")
> [@jshore](#): > > When there are people like Ryan making out-and-out lies, the fact that you are arguing semantic points here just shows how desperate conservatives are to find equivalence in dishonesty where none exists. It is pretty much an advertisement for the honesty gap between the parties in the U.S. that you are forced to start threads like this. Clearly worthy of repetition as **moonshot925** continues to prove the point. ---
**Author:** ![Hentor\_the\_Barbarian](https://avatars.discourse-cdn.com/v4/letter/h/8edcca/32.png) [@Hentor\_the\_Barbarian](https://boards.straightdope.com/u/Hentor_the_Barbarian)\ **Post date:** [September 8, 2012, 2:44pm UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/117 "2012-09-08T14:44:56Z")
> [@moonshot925](#): > > So Clinton did indeed have a deficit every year. No surplus. Didn’t you read Sam Stone’s post? Maybe as a conservative you’re not used to seeing a budget number that does not have a - in front of it. Even if you want to play games, you’re still giving falsehoods. ---
**Author:** ![moonshot925](https://avatars.discourse-cdn.com/v4/letter/m/f0a364/32.png) [@moonshot925](https://boards.straightdope.com/u/moonshot925)\ **Post date:** [September 8, 2012, 3:23pm UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/118 "2012-09-08T15:23:38Z")
> [@Hentor\_the\_Barbarian](#): > > Didn’t you read Sam Stone’s post? Maybe as a conservative you’re not used to seeing a budget number that does not have a - in front of it. Even if you want to play games, you’re still giving falsehoods. Yes. If Social Security is excluded there was a “surplus” in FY 1999 and FY 2000. But the mistake that is being made is only excluding Social Security. What should also be excluded is the Civil Service Retirement Fund, Federal supplementary medical insurance Trust fund, Federal Hospital Insurance Trust Fund, Unemployment Trust Fund, Military Retirement Fund, Transportation Trust Funds, Employee life insurance & retirement and a few others. If all of those are excluded then there was a deficit every year. ---
**Author:** ![Lobohan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lobohan/32/79_2.png) [@Lobohan](https://boards.straightdope.com/u/Lobohan)\ **Post date:** [September 8, 2012, 3:33pm UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/119 "2012-09-08T15:33:15Z")
> [@moonshot925](#): > > If all of those are excluded then there was a deficit every year. If you exclude your legs, you’re pretty short. ---
**Author:** ![moonshot925](https://avatars.discourse-cdn.com/v4/letter/m/f0a364/32.png) [@moonshot925](https://boards.straightdope.com/u/moonshot925)\ **Post date:** [September 8, 2012, 4:06pm UTC](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918/120 "2012-09-08T16:06:08Z")
> [@Sam\_Stone](#): > > What is true is that Bush’s first four years contributed 1.917 trillion to the debt, while Bill Clinton’s last four actually paid the debt down by about 26 billion dollars. No. That’s not true at all. 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 [Previous page](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918.md?page=5) [Next page](https://boards.straightdope.com/t/clinton-claimed-he-had-four-surplus-budgets-at-dnc-speech/633918.md?page=7)