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Comment by innocentoldguy | Hacker News Reader

Clinton's "surplus" is a myth. The national debt increased every year that Clinton was in office and the tax revenue generated by his policies never exceeded government spending, which would be required in order to legitimately claim a surplus.

If you look at the numbers, the Clinton "surplus" was merely some fancy accounting achieved by borrowing money from government trust funds, like social security.

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> If you look at the numbers, the Clinton "surplus" was merely some fancy accounting achieved by borrowing money from government trust funds, like social security.

What numbers? Care to cite them?

Social Security has always held its surplus in t-bonds. Ergo, the government has always "borrowed" from SS. So I'm having trouble seeing how it was magically different under Clinton. And also why republican presidents don't use the same "fancy accounting" to make their deficits look lower.

The St. Louis Fed disagrees.

https://fred.stlouisfed.org/graph/?g=IuLV

You're confused: the annual "deficit" and the total "national debt" are two different things. The deficit is the difference between income and spending in a fixed time period. The national debt is the cumulative amount owed.

A balanced budget (i.e., zero deficit) or even a large but insufficient surplus doesn't stop the national debt growing. It's like a credit card. Even if every month you pay off what you spent the previous month (balanced budget), the interest keeps compounding on the principal you owe and your total debt keeps growing. Unless the government makes a serious effort at paying off the interest and paying down the principal, the national debt will keep growing. (Of course, the principal plus interest becomes the new principal on each compounding cycle, so the principal is a moving target.)

I am not confusing the deficit nor the national debt. I simply mentioned both. I addressed the deficit in my original comment. I'll do so again for the sake of convenience: Clinton's tax revenue was never enough to cover all government spending. In every year that Clinton claimed to have a surplus, government spending increased by a bigger amount than the claimed surplus. In other words, Clinton borrowed from other areas of government (social security, etc.) to fill the gap between tax revenues and government spending. Here are both the national debt and the deficit for the Clinton years:

  Fiscal Year     National Debt           Deficit
  1994            $4.692749 trillion      $281.26 billion
  1995            $4.973982 trillion      $281.23 billion
  1996            $5.224810 trillion      $250.83 billion
  1997            $5.413146 trillion      $188.34 billion
  1998            $5.526193 trillion      $113.05 billion
  1999            $5.656270 trillion      $130.08 billion
  2000            $5.674178 trillion      $17.91 billion
  2001            $5.807463 trillion      $133.29 billion

Since you brought up a credit card example, what Clinton basically did was pay down his Visa using his MasterCard. We are still paying off his MasterCard.

UPDATE: Fixed table formatting.

Do you have any mainstream references handy that delve deeper into this? Thanks!

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