Do you even know the differnece between a deficit and Debt?

Discussion in 'Economy' started by Charles_Main, Feb 15, 2009.

  1. Charles_Main
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    Charles_Main AR15 Owner

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    I only ask because I have heard a few people lately say that Clinton focused on paying down the Debt.

    For the record for those of you who clearly do not know, A Deficit is the short fall in a year between what we spend and what we take in. The Debt is the total of all those deficits that keep adding up. Clinton did not "focus on paying down the Debt" He did not pay off one penny of it.

    Of course any of us that were around and not still on the boob back then know the truth.

    The truth is we had some so called surpluses (I think the missing SS money had something to do with them) but not one damn thing was done with them. They did not use them to pay one penny of the Debt. There was lip service paid to using them to sure up SS, but in the end they were just spent. So how was that a surplus again?
     
  2. Annie
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    Annie Diamond Member

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    If memory serves, the fast falling interests rates helped his number too.
     
  3. editec
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    editec Mr. Forgot-it-All

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    Well, while I am not qualified to pierce that tissue of lies that we think of as Federal Government accounting (hell I can't keep my checkbook balanced!) I am reasonably certain that the Federali's checkbook balanced a LOT better when Clinton was in Office than it has of late.

    Clinton's luck of the draw as it pertains to the economy was far better than Junior's was, that's for damned sure.

    And let us ALSO agree, that the POTUS and CONGRESS at each time both shares SOME modicum of responsibility for what happened on their watch, too.

    Every POTUS and every Congress does have to play the hands they've been dealt, right?
     
  4. Neubarth
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    Neubarth At the Ballpark July 30th

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    Bill Clinton was a fiscal conservative. That was understood by alll students of history.

    We need more men like him. That is a reality.
     
  5. Charles_Main
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    Charles_Main AR15 Owner

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    Clearly, and I was not disputing that. I was simply saying that Even for the few shorts years we had a so called surplus. We did not use any of it to pay down the Over all Debt. We simply did not add any new Debt for those years. In Fact I am not even sure if we paid all the interest on the debt. Anyone know?



    Good of you to admit Clintons Luck was Much better than Bushes. The fact is Bush actually inherited a minor Recession from Clinton. Remember the Tech Bubble Bursting. Most Economist will tell you that Tech bubble was the source of most of the extra revenues which gave us a temporary Surplus.

    Most defiantly. When you get down to it, I think the Congress is to blame the most. Yes the President sets the tone with a Budget, and can Veto spending bills, but it takes congress Appropriate funds. If they wanted to a balanced Budget they could do it despite what the sitting president wanted.

    Clearly, Obama and the Democrats have been dealt a shitty hand, Nobody is going to deny that. What they do however, will stick to them. If as I suspect this new Massive Stimulus has little effect, and only leads to Inflation and more pressure on Credit. It will be on their hands, oh they will try and blame Bush, and they will be right in so far as he did play a part in getting us here, but the American people will know who to blame on this one.

    800 Billion and we have not even got into his spending plans he talked about on the campaign Trail, like health care. They are still talking about yet another Trillion or so for a housing bail out. Add to that what was spent in the last 2 years, when yes Bush was president, but Democrats were also in charge of congress, and this had better work, or The Dems will be out of power fast, and we will be stuck with Dem Light Republicans again.

    The Cycle just goes back and forth, only the Debt keep piling up. Sooner or later the dam is going to burst.

    To bad the was not a Pragmatist party. You know people that did not use emotion at all, and simply used Logic, and did the logical thing, and not the political one?

    To bad indeed.

    It's a lost cause

    America is dying. Morphing into something else, something less great.

    :(
     
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    Last edited: Feb 15, 2009
  6. auditor0007
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    auditor0007 Gold Member

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    We have never made an attempt at paying down the debt, and we never will, because there is no good reason to do so. We would have to tax everyone to death in order to do so. However, paying down the debt is different from reducing the debt as a percentage of GDP. This is how the debt really gets paid down, or I should say can get paid down. As the economy grows, if spending is kept in check and the government runs close to a balanced budget, the growth in the economy reduces the percentage of debt in relation to GDP. If the debt is small in relation to GDP, it isn't a problem. However, when the debt grows in relation to GDP, as it has and is continuing to do currently, than just making the interest payments on that debt can become overbaring in relation to overall revenues. If the debt is allowed to grow too large, eventually there will need to be massive tax increases just to cover the interest, or there will need to be massive cuts in spending.
     
  7. Peejay
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    Peejay BANNED

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    There is no paying off this debt. Over 40% of the debt is owed to the Federal Reserve. The rest is owed to private entities, other countries and business. None of it can or will be paid. It is, for all intents and purposes, unredeemable. What makes it unredeemable is not just the amount, but specifically the amount owed to the Fed. And it's not the fact that it is owed so much as the fact of where it was borrowed from. The loans from other interest represent actual value. The loans from the Fed do not. The loans from the Fed are not represented by value. There is no product behind that money. It does not exist in any tangible form. It is an IOU to ourselves. If you can imagine being broke and asking yourself for a loan. Neat trick. Where the problem comes is any attempt to repay the loan. It can't be done. If we were to actually try to repay the loan, every dime paid in disappears because it never existed. The Fed would absorb every nickel of actual currency, the representation of product, and still not be able to reconcile the amount of money it purports to have loaned. You can't loan something you don't have. The loan is actually just an illusion of confidence. So now they have to make it exist if we try to pay it back. The only way to make it exist is to represent it with actual currency, the representation of product. So to reconcile the fake loan, the Fed would have to absorb the massive amount of cash it claimed to have in making the loans and then make that cash disappear from circualtion. The money would have to be destroyed and removed from the economy just to prove that it ever existed at all.

    It's tough to get your brain around it. But that's the best I can articulate.
     
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  8. Care4all
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    Care4all Warrior Princess Supporting Member

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    The National Debt is the accumulation of money borrowed from foreigners and intragovernmental holdings in order to pay for what the government spends, that is over and above what taxes we take in.

    Our total Public Debt/National Debt did rise slightly, under Clinton even on the years he supposedly balanced the budget because social security is included in the Federal Budget, and has been since President Johnson, which has been over collecting taxes from us since Reagan doubled the SS tax rate in 1983, leaving a surplus of the SS taxes, and this excess or surplus of SS taxes, is used to balance the budget.

    What Clinton did is he took the surplus SS monies that were not needed to balance the budget and put him in a surplus, and used those funds by paying down the debt we owed to foreigners...

    the total debt did not go down and you would not see it go down, even with this action of paying down the debt to foreigners with the SS surplus money, because it became debt that we now owed SS.

    It still was a great move of clinton's to use SS surpluses to pay down the foreign debt imho.

     
  9. indago
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    indago VIP Member

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    CLINTON/DEBT
     
  10. Care4all
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    Care4all Warrior Princess Supporting Member

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    Indago,

    your link provided the precise information to prove what I said was RIGHT. Thank you....though I think you believe it proved me wrong....

    Your link showed how the PUBLIC debt went DOWN and the intragovernmental debt went up.....

    This is what Clinton did ON PURPOSE to help save social security, under the system we have for balancing the Budget.

    The public debt (debt owed to other countries) which is at a HIGHER INTEREST RATE than debt owed to intragovernmental holdings, (Social Security), was paid down with the surplus SS funds that are collected each year and incorporated in to the Budget.....legally since president Johnson.

    Our Public Debt went from $3.79 trillion down to $3.34 trillion, under Clinton....like I said, this is the debt we owe to others, not debt we owe to OURSELVES.

    Clinton used the SS surplus taxes, which are INCORPORATED IN TO THE YEARLY BUDGET by LAW, to pay down the DEBT we owed to OTHER FOREIGNERS.

    While this adds debt to the intragovernmental holdings, (SS), this is money we owe OURSELVES verses money we owe others, as I stated....

    And this was crucial for the booming economy under Clinton....paying down the public debt that we owed others, because this freed up money for businesses to borrow, and grow....and it put less of our future in to the hands of foreigners.

    I have never said Clinton paid down the National Debt, the combination of intragovernmental debt and public debt.....but i have stated that Clinton paid down the PUBLIC DEBT, the debt we owe to others.

    Clinton did balance the BUDGET, unlike Bush or any other president but 1.

    The Budget includes the money from social security taken in and paid out. BY LAW, SS funds are in there in the Budget. This is NOT something Clinton decided to do all on his own, the SS monies were put in to the Budget by President Johnson, over 40 years earlier....and EVERY PRESIDENT since Johnson has had SS funds incorporated in to the yearly BUDGET.

    (let's not try to be intellectually dishonest, and imply that Clinton played with numbers because those SS funds were LEGALLY required to be part of the yearly Budget).

    I can understand how Divecon and you and Charles and others DO NOT UNDERSTAND all the numbers and intricacies of the BUDGET and the NATIONAL DEBT, and the Public debt vs the intragovernmental holdings....

    It is about as confusing as they come to the average Joe, and for good reason. (I'm a Math Addict, numbers are alive, and speak to me...i love them! :) )

    But the bottom line, is that Clinton balanced the Budget, he reduced the deficit spending from when he took office and he reduced it to the point of having the SS surplus funds left over, and not needed for their spending in the Budget. So he took these SS funds and paid down the Public debt, the debt we owed to others, which increased the debt owed to ourselves, but this debt owed to ourselves is a safer, cheaper debt, that opens up money to be borrowed by the 'businesses/economy' in the public money fair.

    care
     

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