Hush. You are a Siamese twin, so your left pocket belongs to a different person than your right pocket.
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.
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.
That’s what she said.
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:
- Its assets go up by the exact same amount as its new liabilities, or
- 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.
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.
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.
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:
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:
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
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.
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
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.
So Clinton did indeed have a deficit every year. No surplus.
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:
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?
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.
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
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.
Clearly worthy of repetition as moonshot925 continues to prove the point.
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.
If you exclude your legs, you’re pretty short.
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