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Comment by yequalsx | Hacker News Reader

Actually, we did start to pay off the debt but this was at the very end of the Clinton administration. If you'll look closely at the graph you supplied you'll see this. Note that the first Bush budget wouldn't be until 2001.

The debt wasn't being paid off at a great rate but it was being paid off and the person's main point that you responded to is correct. We were well off financially until some very irresponsible actions by the Bush administration.

I disagree with the point about us never being able to pay off the debt. It can be done and there are historical examples of countries with higher debt/GDP ratios that were paid off.

Note: When talking about debt of a country people generally mean the debt of the government. There was a budget surplus at the end of the Clinton presidency and this is what people usually mean when they claim a government was/is "paying off the debt".

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False. The closest he came was from 1999-2000 where he only increased the debt by $23B.

    DATE          VALUE 
    
    1990-09-30   3206.3
    1991-09-30   3598.2
    1992-09-30   4001.8
    1993-09-30   4351.0
    1994-09-30   4643.3
    1995-09-30   4920.6
    1996-09-30   5181.5
    1997-09-30   5369.2
    1998-09-30   5478.2
    1999-09-30   5605.5
    2000-09-30   5628.7
    2001-09-30   5769.9
    2002-09-30   6198.4

http://research.stlouisfed.org/fred2/data/FYGFD.txt

According to the Congressional Budget Office there was a decrease in 2000/2001. According to the NPR story and the original graph you linked to there was a decrease at this time.

http://www.cbo.gov/budget/data/historical.pdf

According to the PDF there was a decrease in public debt for a number of years during the Clinton administration.

NOTE: I think the chart you linked to includes private debt and isn't just federal debt.

According to your CBO link, debt held by the public decreased. I'm not disputing this point. However, debt held by the public is only one component of federal debt.

Your note is also incorrect. From my link:

    Title:               Gross Federal Debt

The other kind of federal debt is intragovernmental debt; that is, debt which the federal government owes to itself. This category includes the Social Security Trust Fund.

And that does not really count. If government department A owes 10 dollars to government department B, the total net government debt does not change. So yequalsx's data is correct for the purposes of the present discussion.

Why does it not really count if you're actually paying back the social security trust fund? They can borrow from it, surely it also counts as debt. Just because you say it's going from department a to b doesn't mean there aren't real implications for that money being owed or not.

If you borrow from your 401K, you're borrowing from yourself, and you eventually have to pay it back. It's money that you owe, to be paid with funds that can either be used to buy jelly beans or put back in your 401K.

If the government borrows from Social Security, it takes that money out of itself and spends it out in the economy. SS and the government has a smaller pile of cash, and the government owes itself. When the money is put back, it's with funds that could either be used to buy bullets or put back in SS.

It's perfectly possible to balance the budget, create a surplus and start paying down the debt, and have the debt still increase because the interest exceeds the surplus. This is what happened under Clinton, he created a surplus and started using it to pay down the debt but it wasn't big enough to stop the growth. Had Bush stuck to Clinton policies, it would have been.

As long as Debt increases slower than inflation your paying it down.

What cost $5605.5 in 1999 would cost $5796.09 in 2000. http://www.westegg.com/inflation/infl.cgi and 5769.9 is less than $5796.09.

Edit: I have seen the same argument vs infrastructure or GPD. But I think inflation is probably the safest measurement, because GDP can drop.

There are lies, damned lies and statistics.

We could pay off the debt if we wanted to; it definitely is possible.

The question in my mind is - if a country like the US has the ability to print the world's reserve currency, isn't it beneficial to run a small deficit to increase GDP? I don't see any problems running small deficits, of course large amounts of public debt are rarely ever a good idea.

It is absolutely beneficial, in most cases, and it's not even a question of having the world's reserve currency.

A look at sectoral balances helps to analyze this: the government's budget deficit is equal to the non-government's (private plus external sector) budget surplus. That's just a basic accounting fact.

So if the non-government sector desires to be in surplus (as it usually does), then the government must run a deficit. If it tries to run a surplus despite the non-government desires, there is a conflict, and someone will have to budge. Usually, the first ones forced to budge are those with the least economic clout. The result tends to be large scale unemployment.

There is nothing inherently bad or good about government deficits (I dislike the sentiment that is so often voiced by politicians, who frame the deficit and debt as a moral issue - those are just numbers in computers, for Bob's sake! Unemployment, poverty, those are issues where morals come into play). It's simply that given the typical long-term private sector behavior, a long-term government deficit is the pragmatic and economically responsible thing to have.

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