The Myth of the Clinton Surplus?

[Wetzelbill]

I was sent this today by somebody who doesn't believe Clinton had a budget surplus, can you guys help me debunk this? I wonder if this guy is credible who did this article.

The Myth of the Clinton Surplus
http://www.letxa.com/articles/16

[Lifetimedem]

1. I do not think

there was an actual surplus, but according to Washington bookkeeping it was a potential surplus if all things stayed the same.

[ThatPoetGuy]

2. Well, sorta.

The issue is that people say "Clinton generated record surpluses" without knowing what it means.

There are three terms to understand. First there's the DEBT. The debt is the total amount the government owes. The debt can increase or decrease. The amount the debt increases is your DEFICIT. The amount the debt decreases is a SURPLUS.

Clinton did indeed rack up record surpluses. He never paid off the entire debt, which would be a preposterous undertaking, but he had fewer deficits, and more and larger surpluses, than any President in history.

That article debunks a misunderstanding -- people have a tendency to think the word "deficit" means the total debt, and that "surplus" means all the moolah left over after paying the debt. When the government's revenues fall short and the debt increases, that's a deficit; Bush and Reagan hold the records for that. When the revenues are good enough that some of the debt can be repaid, that's a surplus, and Clinton did create record surpluses.

[trof]

3. Most understandable explanation I've ever heard. Thanks.

[TahitiNut]

4. Yup. Here's a graph of the annual on-budget deficit as a percentage of GDP.

It was slightly better than break-even in 1999 and a surplus (reduced the debt) in 2000, after a steady track record of deficit reduction. It's worth noting that Reagan/Bush increased the national debt more than at any time post-WW2, putting future generations into debt at unprecedented levels.

[Wetzelbill]

5. That's basically what I thought

I just didn't really know how to lay it out like that. Like I knew the debt was huge, just ridiculous and that wasn't paid off, but I wasn't sure exactly how to explain the rest. Thanks.