The Deficit: Comparing 2010 to 2000 when we had a surplus

[NYcarbineer]

I know you're still smarting from my proving you a liar the other day, but really, get over it. Holding grudges is not conducive to intelligent debate.

Clinton had a budget surplus for 2 or 3 budgets. Period.

Question, which I know I won't get a straight answer from you on, but I'll ask anyway, because getting you to avoid the question makes almost as good a point as getting you to answer one:

Did Clinton use budgetary methods THAT NO OTHER PRESIDENT EVER USED, before or after, in order to falsely create the appearance of several annual budget surpluses?

Barbie, now that it has been proven that both your character and your knowledge have both reached their nadir, on what possible basis would I entertain any questions from you?

Henceforth, Barbie, you will merely be relegated to the pigeon hole of comic relief/human piñata.

NYC, walk away dude you look really bad in this exchange. I dont know what went on in the other thread but you look really bad in light of all that has been said in this thread.

And yes clinton still added to the national debt every year and yes clintons budgets had a surplus.

Ah, yes, a wingnut is telling me I look bad in an exchange where the facts are on my side and the personal attacks are on the other.

Mind your own business.

 

[Toro]

1) what happens when they no longer receive the 6% in to match my 6% plus interest out? they tell me sorry we can only give you the say $ 100 we owe you we'll give you 80 ....

2) IF that is correct they then have to use direct ins from other sources than suckers like me who are no longer sending them money to 'invest', as in borrowing it from general funds/revenue or borrow it selling bonds to real investors or themselves ala QE1&2?

Yes. And no. All funding comes from the taxpayer eventually.

It depends on the funding status of the trust. If the trust were fully funded or more, then you would get more, or more likely, the taxpayer would contribute less. If the trust was not fully funded - as it currently is now - then taxpayers would either have to contribute more or you would get less. Its not an issue as long as the population keeps growing.

Think of it another way. In my example of you investing solely in government bonds, when the bonds expire, cash is paid to you by the government. They are paying back that obligation. That obligation is paid for by the taxpayer. If the government can continue to sell more bonds to others, then it can use the proceeds from bond sales to pay you back. If the population is growing, it has the capacity to sell even more bonds than it redeems.

 

[Toro]

Surplus
The amount by which the revenue of a government from taxes, tariffs and other sources exceeds its expenditures. A surplus means that the budget is likely healthy, at least in the short-term, and in any case the government does not have to resort to borrowing.
Surplus financial definition of Surplus. Surplus finance term by the Free Online Dictionary.

So, by the definition you just posted, which is the definition of a surplus, the budget was in surplus the last years of the 1990s. This is where you should stop arguing.

The part you've bolded is a qualifier (and isn't in fact the definition of a "surplus"). The part of the debt that matters to the surplus is the tradable debt of the United States, since cash from the surplus is used to pay down debt. Tradable debt fell at the end of the 1990s.

 

[Misty]

If Obama raises taxes back to the Clinton tax increases, it won't make a dang bit of difference because we are spending a way higher amount of money.

Any idiot knows it doesn't matter how much you make the rich pay in taxes, if you are out-spending it, you are never going to fix any debt. And you will not encourage spending confidence in the private sector.

The government has to gut itself. That's the only answer.

 

[PoliticalChic]

Surplus
The amount by which the revenue of a government from taxes, tariffs and other sources exceeds its expenditures. A surplus means that the budget is likely healthy, at least in the short-term, and in any case the government does not have to resort to borrowing.
Surplus financial definition of Surplus. Surplus finance term by the Free Online Dictionary.

So, by the definition you just posted, which is the definition of a surplus, the budget was in surplus the last years of the 1990s. This is where you should stop arguing.

The part you've bolded is a qualifier (and isn't in fact the definition of a "surplus"). The part of the debt that matters to the surplus is the tradable debt of the United States, since cash from the surplus is used to pay down debt. Tradable debt fell at the end of the 1990s.

Friend Toro, there are some things on which we should be able to agree:

1. The national debt grew under Bill Clinton. It increased some 41%.

2.The figures that I have provide more than once indicate same. 41%.

3. An interesting question arises from the resistence that you show in admitting this...

...Why?

4. Well, the 'why' is answered as follows:
a) You are an honest fellow, so you will not lie and deny the figures, and
b) the admission, you realize, eviscerates any logic to the idea that President Clinton provided excess funds by his management of the economy, i.e., a surplus.

5. Folks who understand the lingua franca in effect here on the board, immediately feel the unease of claiming that there is a surplus at the same time as an increase of in the national debt, and the necessity of budgeting interest payments.

a) except those attempting to use sophistry to support their particular political persuasion.
b) else, why demand to pay interest on borrowed funds if the fisc did not require same.


Since I am hesitant to apply 5a) above to you, as it applies to the lower-level posters in the thread, I'm going to make the assumption that, for you, this is an intellectual ping-pong game that you will use graphs, charts and use abstruse and arcane terminology toward that employ.

 

[Quantum Windbag]

It's simple. She's trying to redefine 'budget surplus' in a way that no one outside of some fringies use.

The funniest part is, and it's funny EVERY time she pulls this, and this isn't the first time,

even if you use her own loony concoctions and loony math,

it still turns out that Clinton's numbers were FAR closer to balance than

Reagans, Bush Sr's, or GW's.

It's the same game as the wingnuts around here who try to switch to U-6 unemployment numbers when talking about UE under Obama to try to make it look like Obama's numbers are up in the high teens.

It's the standard practice of people like PC because they simply cannot debate on the facts.

If Bush had used the Medicare trust fund to balance the budget you would be screaming about it until hell froze over. Why does Clinton doing it get a pass?

Bush cited the surplus as justification for cutting taxes, first of all. Are all you people now of the opinion that Bush was lying????

I haven't said ANYTHING other than pointing out that Clinton did in fact have balanced budgets near the end of his presidency.

About a surplus existing at all?

Yes.

As for Clinton, he submitted a budget plan that, if carried through, would have resulted in a balanced budget in a few years. The budget never actually got balanced under Clinton because he relied on intragovernmental lending to make it look like revenues exceeded expenses.

 

[Quantum Windbag]

That's a different argument. SS should be run like a real pension fund, IMHO. You would fully fund SS and give people a tax cut if you did.

How they run SS is a different argument, but buying T-bills with government money and calling it revenue is lying. If that was all it took Congress could buy up $15 trillion in T-bills with new money and declare the debt eliminated.

Social Security is a creditor to the US government. Social Security has its own revenue stream that it invests in the US government by loaning that money to the US government.

What the government owes Social Security 20 years from now when John Doe retires is not a 2011 budget item, nor was it a 2000 budget item.

Gee, where did I say it was.

I will put this in simple words so that even you can understand.

The government takes the money paid into SS for the retirees to have in 20 years, buys T-bills with it, and counts those T-bill purchases as revenue in the 2000 and 2011 budgets. That allows them to push the debt down the road for 10 or twenty years, and make the budget today look like less of a problem. It also allows them to spend more money than they would otherwise be able to do because they would not normally be able to use the SS trust fund for any spending.

 

[Quantum Windbag]

Actually you seem very intelligent and I would like to have an honest discussion with you as opposed to nitpicking over things that don't matter.

Just because you think they do not matter does not mean they do not matter.

 

[Quantum Windbag]

It's simple. She's trying to redefine 'budget surplus' in a way that no one outside of some fringies use.

The funniest part is, and it's funny EVERY time she pulls this, and this isn't the first time,

even if you use her own loony concoctions and loony math,

it still turns out that Clinton's numbers were FAR closer to balance than

Reagans, Bush Sr's, or GW's.

It's the same game as the wingnuts around here who try to switch to U-6 unemployment numbers when talking about UE under Obama to try to make it look like Obama's numbers are up in the high teens.

It's the standard practice of people like PC because they simply cannot debate on the facts.

If Bush had used the Medicare trust fund to balance the budget you would be screaming about it until hell froze over. Why does Clinton doing it get a pass?

How could Clinton 'use' the Medicare trust fund to balance the budget when he didn't control any of the agencies/organizations who add up the numbers and determine whether or not any year's budget was balanced????

Do I actually have to explain this to you?

Clinton and Newt got together and decided to lie to everyone about everything. They decided that Clinton would get to claim that the budget was running a surplus, and the Republicans would get to claim they kept their Contract with America to reduce the size of the government. this made everyone in DC happy because they got to lie to their base, and the base was happy because they liked the lies they were hearing.

Once you learn that there is no difference between the tow parties you will be on your way to being able to understand how the government really works, and maybe even throwing off the shackles. Why do you think both parties hope the Tea Party just disappears? Those idiots want the politicians to actually keep their promises and stop lying to everyone, and only care that government spending and the debt go down, even if it means putting a bunch if radicals that think a balanced budget amendment is a good idea into Congress.

 

[Quantum Windbag]

It is irrelevant whether or not the national debt went up as it pertains to whether or not there was a surplus. A surplus is when receipts exceed expenses.

Tradable debt fell.
Net debt fell.
Gross debt rose.

The net balance of the United States financial condition improved at the end of the 90s.

Why is the government owing itself more money better than the government owing money to someone else? The way I see it that money the government borrows from itself is owed to us anyway, unless you think the SS trust fund is actually the governments money.

Because the money the government owes the public is backed by the full faith and credit of the United States. Failing to pay that money would cause a dramatic decline in our credit rating and send interest rates through the roof.

The money the government owes itself is almost exclusively in special-issue treasuries that can be cancelled at any time with no bearing on our credit. Congress can simply decide not to repay the trusts - and in fact, most plans to "reform" Social Security in order to make it solvent involve some level of "defaulting" on those treasuries.

You think you can cancel the SS and Medicare payments without consequences? Try it and see what happens.

By the way, treasuries are actually backed by the same thing no matter who holds them, be it a foreign government that owns billions, or your son with the $50 dollar bond stuck in his sock drawer for college. Defaulting on any of them is a default on all of them.

 

[Toro]

Surplus
The amount by which the revenue of a government from taxes, tariffs and other sources exceeds its expenditures. A surplus means that the budget is likely healthy, at least in the short-term, and in any case the government does not have to resort to borrowing.
Surplus financial definition of Surplus. Surplus finance term by the Free Online Dictionary.

So, by the definition you just posted, which is the definition of a surplus, the budget was in surplus the last years of the 1990s. This is where you should stop arguing.

The part you've bolded is a qualifier (and isn't in fact the definition of a "surplus"). The part of the debt that matters to the surplus is the tradable debt of the United States, since cash from the surplus is used to pay down debt. Tradable debt fell at the end of the 1990s.

Friend Toro, there are some things on which we should be able to agree:

1. The national debt grew under Bill Clinton. It increased some 41%.

2.The figures that I have provide more than once indicate same. 41%.

3. An interesting question arises from the resistence that you show in admitting this...

...Why?

4. Well, the 'why' is answered as follows:
a) You are an honest fellow, so you will not lie and deny the figures, and
b) the admission, you realize, eviscerates any logic to the idea that President Clinton provided excess funds by his management of the economy, i.e., a surplus.

5. Folks who understand the lingua franca in effect here on the board, immediately feel the unease of claiming that there is a surplus at the same time as an increase of in the national debt, and the necessity of budgeting interest payments.

a) except those attempting to use sophistry to support their particular political persuasion.
b) else, why demand to pay interest on borrowed funds if the fisc did not require same.


Since I am hesitant to apply 5a) above to you, as it applies to the lower-level posters in the thread, I'm going to make the assumption that, for you, this is an intellectual ping-pong game that you will use graphs, charts and use abstruse and arcane terminology toward that employ.

I'm not saying the national debt didn't rise under Clinton. I'm saying that in the final years of the 90s, he ran a surplus. I'm also saying that the rise in the national debt is a function of government accounting that does not account for the assets of the government, and that implying an increase in the national debt means deficits is factually incorrect. You don't have financial people making this argument, even from the right.

 

[Trajan]

1) what happens when they no longer receive the 6% in to match my 6% plus interest out? they tell me sorry we can only give you the say $ 100 we owe you we'll give you 80 ....

2) IF that is correct they then have to use direct ins from other sources than suckers like me who are no longer sending them money to 'invest', as in borrowing it from general funds/revenue or borrow it selling bonds to real investors or themselves ala QE1&2?

Yes. And no. All funding comes from the taxpayer eventually.

It depends on the funding status of the trust. If the trust were fully funded or more, then you would get more, or more likely, the taxpayer would contribute less. If the trust was not fully funded - as it currently is now - then taxpayers would either have to contribute more or you would get less. Its not an issue as long as the population keeps growing.

Think of it another way. In my example of you investing solely in government bonds, when the bonds expire, cash is paid to you by the government. They are paying back that obligation. That obligation is paid for by the taxpayer. If the government can continue to sell more bonds to others, then it can use the proceeds from bond sales to pay you back. If the population is growing, it has the capacity to sell even more bonds than it redeems.

That obligation is paid for by the taxpayer. If the government can continue to sell more bonds to others, then it can use the proceeds from bond sales to pay you back. If the population is growing, it has the capacity to sell even more bonds than it redeems.


working taxpayers...right? Fica contributors?

 

[kaz]

implying an increase in the national debt means deficits is factually incorrect

That's impossible since government uses cash based accounting. And ironically that greatly improves the picture over if they used accrual accounting. The deficit went up every year, the government uses cash based accounting, that means the increase in the national debt is exactly the deficit. The so called Clinton surplus is just a flat out lie.

 

[Too Tall]

Revenue's: Currently are down 5.7% as a percent of GDP compared to 2000
Not surprising. GDP is down, uneployment has doubled, gas prices have doubled, revenue has no where to go but down. Unfortunately your premise of taking more money from people to solve the problem is fundamentally flawed. Doing this only exacerbates the problem. People have less to spend on basic essentials, the cost of day to day living increases, savings decrease, and unemployment rises ever further higher as the cost to businesses has to be offset by smaller overhead.
That means fewer jobs.
Nice job, chief.

Defense: Currently up 1.75% as a percent of GDP compared to 2000
Perhaps Obama should go before Congress and the UN like George Bush did before arbitrarily deciding who we go to war with?

Medicare: Currently up 1.1% as a percentage of GDP compared to 2000
Perhaps you should look at expenditures BEFORE government got into the healthcare business. I know how shocking this must seem to those who love bloated government, but anytime government gets into business, the cost shoots up astronomically.

Unemployment compensation: Currently up .97% of GDP compared to 2000
That's because benefits keep getting extended. You can thank government regulations upon regulations for this problem.

Health: Currently up .82% of GDP compared to 2000
Speaking as someone in the healthcare industry, I can readily attest that government paperwork takes more than half of a doctors time in a single work day, thus he/she sees less patients. The nightmare will only get worse when Obama takes over the industry entirely.

Social Security: Currently up .70% of GDP compared to 2000
No idea what to do here. Should have been taken care of long ago.
Bush tried. Democrats response? There isn't a problem with Social Security. Those guys are so smart, ain't they?

It is hard to take someone seriously when they make statements that are complete untruths. GDP is down since 2000? What planet do you live on? GDP in 2000 was $9.8 trillion. In 2010 it was $14.6 trillion. That is a 49% increase in GDP. Now let's look at tax revenue. In 2000, it was just over $2 trillion; in 2010, it was just over $2.1 trillion. That is an increase of 5%. So while the economy grew by 49%, tax revenue increased by 5%.

While tax cuts can increase revenue, if taxes are cut too much and the economic growth does not materialize, all of a sudden, there is a dramatic reduction in revenue. This is exactly what happened with the Bush tax cuts. Revenues did increase through 2006 or 2007, but then the bottom dropped out. On top of that, even with the temporary increase in revenues, Bush along with the Republican Congress continued spending more and more so that the deficits grew larger and larger. Then when the economy turned upside down, we were left with these massive deficits.

What I find so humorous is that after watching all this happen, conservatives will now tell us we need to cut spending while cutting taxes on top of it. We had tax cuts on top of tax cuts on top of tax cuts, and yet the economy is going nowhere. According to the right, tax cuts are the way to get the economy moving again, even though we can see already see that it has not worked long term.

It seems to me that the Democrats took control of the Congress in 2007. (when the bottom dropped out)

 

[Chris]

So if you care about the deficit it might be useful to look at the last time we have a balanced budget (2000) and compare it with today's budget (2010). Not suprisingly both sides are playing fast and loose with the truth...

Of course you have to adjust for the growth of the economy. The common approach is to normalize the data in terms of making it all a percentage of GDP. I have looked at budget categories as a percent of GDP and compared 2000 and 2010. Remember 2000 was also a Democratic President and Republican Congress. They compromised to balance the budget.

The biggest gaps then and now in descending order are:

Revenue's: Currently are down 5.7% as a percent of GDP compared to 2000
Top marginal tax rates are at an all time low, Capital gains rates are 5% below an all time low. Hard to make a case the wealthy are overtaxed and by historical standards they are undertaxed. The Bush tax cuts should be repealed

Defense: Currently up 1.75% as a percent of GDP compared to 2000
You can't run 3 wars and maintain troops in places of all wars past. We have a constitutional mandate to defend the country but we don't have one to defend the rest of the world. Need a real discussion here what is affordable and practicable. Let other coutries pay for their own defense.

Medicare: Currently up 1.1% as a percentage of GDP compared to 2000
Well we can thank Bush for perscription drug benefits but the Ryan plan at least trys to make a real effort to control costs. Democrats are wrong for demonizing the plan and mobilizing seniors against it. With some type of benefit floor Ryan's plan is credible and should be adopted.

Unemployment compensation: Currently up .97% of GDP compared to 2000
We need a revenue nuetral restructuring of our tax code to generate jobs. My choice, eliminate corporate income taxes, raise the capital gains tax to the level of income tax, tax net capital sent overseas. This will generate tax revenue from overseas investment and provide capital for local businesses to grow.

Health: Currently up .82% of GDP compared to 2000
You can't expand access without significant cost cuts in the system. Republicans need to stop talking about repeal and modify the system to impose significant cost reductions that were left out of the original bill. Stop playing political games and help the country.

Social Security: Currently up .70% of GDP compared to 2000
No idea what to do here. Should have been taken care of long ago. Most want back the money they put in but the money was long since given to their grandparents. Have no sense of a solution.

Enough for now. I would post links to support my points but I am not yet allowed.

Two useless wars, the Bush tax cuts, and Wall Street's derivative Ponzi scheme caused the National Debt to more than double.

Bush was the worst president in American history.

 

[Toro]

That obligation is paid for by the taxpayer. If the government can continue to sell more bonds to others, then it can use the proceeds from bond sales to pay you back. If the population is growing, it has the capacity to sell even more bonds than it redeems.


working taxpayers...right? Fica contributors?

Don't know.

 

[PoliticalChic]

So if you care about the deficit it might be useful to look at the last time we have a balanced budget (2000) and compare it with today's budget (2010). Not suprisingly both sides are playing fast and loose with the truth...

Of course you have to adjust for the growth of the economy. The common approach is to normalize the data in terms of making it all a percentage of GDP. I have looked at budget categories as a percent of GDP and compared 2000 and 2010. Remember 2000 was also a Democratic President and Republican Congress. They compromised to balance the budget.

The biggest gaps then and now in descending order are:

Revenue's: Currently are down 5.7% as a percent of GDP compared to 2000
Top marginal tax rates are at an all time low, Capital gains rates are 5% below an all time low. Hard to make a case the wealthy are overtaxed and by historical standards they are undertaxed. The Bush tax cuts should be repealed

Defense: Currently up 1.75% as a percent of GDP compared to 2000
You can't run 3 wars and maintain troops in places of all wars past. We have a constitutional mandate to defend the country but we don't have one to defend the rest of the world. Need a real discussion here what is affordable and practicable. Let other coutries pay for their own defense.

Medicare: Currently up 1.1% as a percentage of GDP compared to 2000
Well we can thank Bush for perscription drug benefits but the Ryan plan at least trys to make a real effort to control costs. Democrats are wrong for demonizing the plan and mobilizing seniors against it. With some type of benefit floor Ryan's plan is credible and should be adopted.

Unemployment compensation: Currently up .97% of GDP compared to 2000
We need a revenue nuetral restructuring of our tax code to generate jobs. My choice, eliminate corporate income taxes, raise the capital gains tax to the level of income tax, tax net capital sent overseas. This will generate tax revenue from overseas investment and provide capital for local businesses to grow.

Health: Currently up .82% of GDP compared to 2000
You can't expand access without significant cost cuts in the system. Republicans need to stop talking about repeal and modify the system to impose significant cost reductions that were left out of the original bill. Stop playing political games and help the country.

Social Security: Currently up .70% of GDP compared to 2000
No idea what to do here. Should have been taken care of long ago. Most want back the money they put in but the money was long since given to their grandparents. Have no sense of a solution.

Enough for now. I would post links to support my points but I am not yet allowed.

Two useless wars, the Bush tax cuts, and Wall Street's derivative Ponzi scheme caused the National Debt to more than double.

Bush was the worst president in American history.

"Bush was the worst president in American history."

He lost the title January 20, 2009.

 

[mike beev]

Loved what you had to say and how you said it!

 

[Trajan]

That obligation is paid for by the taxpayer. If the government can continue to sell more bonds to others, then it can use the proceeds from bond sales to pay you back. If the population is growing, it has the capacity to sell even more bonds than it redeems.


working taxpayers...right? Fica contributors?

Don't know.

ok. I have to ask a clarifying Q, isn't the gov. precluded from using other than fica revenue to pay for fica expenditures?

If Toro is not sure, anyone know?

 

[Quantum Windbag]

That obligation is paid for by the taxpayer. If the government can continue to sell more bonds to others, then it can use the proceeds from bond sales to pay you back. If the population is growing, it has the capacity to sell even more bonds than it redeems.


working taxpayers...right? Fica contributors?

Don't know.

ok. I have to ask a clarifying Q, isn't the gov. precluded from using other than fica revenue to pay for fica expenditures?

If Toro is not sure, anyone know?

Yes.

But FICA is used to buy treasuries, which are, in turn, used to pay for other expenditures.