OMG, moonshot… You guys know “how accounting works” isn’t a liberal plot to trick you, right? That’s just how it works.
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).
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?
(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.
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).
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)
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.
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.
TVTropes is an authoritative source on economics (by comparison to Craig Steiner):
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.
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?
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.
(table one)
This is proof that surpluses existed then - since the debt limit has been increased in each year since then.
:rolleyes: 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.
Same source:
Four years - as Clinton claimed.
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.
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.
At least they saved us from our long national nightmare of peace and prosperity.
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.
Overdrawn? How can that be? I still have more checks!
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.