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Ahh, remember the good old times under Clinton when we were actually paying off the debt. What happened then? They mocked Al Gore for his plans to pay off the d

• refurb 15y ago
  Take a close look at the graph. The debt starts going down for 3 years (at the peak of the market) and they make the assumption that that's going to keep happening for the next 14 years? Yay for gov't estimates. Second, I think the fact that the market crashed in 2000 might have a little something to do with gov't deficits as well.
  • csomar 15y ago
    Yay for gov't estimates. I think the estimates were made for the plans Clinton put. He didn't plan to go on war with Afghanistan or Irak or make huge spending.
• swaits 15y ago
  Total US debt (in dollars, not as a fraction of GDP, which is a horrible measure) increased every year through Clinton (and basically everyone else in modern history).
  • eftpotrm 15y ago
    By what logic is it horrible to measure debt based on ability to pay?
    • swaits 15y ago
      By the logic that we can pretend that debt went down, when it didn't?
    • brown9-2 15y ago
      The nominal value of the debt is not a good measure because it disregards the fact that the value of a single unit (the dollar) changes over time, and doesn't reflect the difficulty in paying it off (i.e. % of national GDP). It's also a bit of apples-and-oranges when you compare the nominal debt of one country with another without looking at the differences in GDP between the countries, i.e. the size of each country's economy.
    • swaits 15y ago
      Because we can increase GDP (via public spending, yay!) and make our debt situation look like it's improving. Look, nominal total debt may not be perfect either, but saying Clinton reduced debt is factually wrong. In every year, we spent more than we had. Debt increased. They all do it. The debt dollar is a horrible instrument that will not end well. We may be decades off, but it's gonna be ugly.
  • DougBTX 15y ago
    Is it more useful to talk about "Total US debt" than "US government debt"? When I first read your comment, I thought you were making the point that the article was misleading because it was using a fraction of GDP as a measure, when it in fact the main feature graph is measured in trillions of dollars. To a lay reader like myself, it would easily lead to confusion if people talk about different numbers without making the distinction clear. Is there a well known relationship between government debt and private debt? Or is talking up Total US Debt just a distraction from the article, which talks about Government Debt?
    • 15y ago
• yummyfajitas 15y ago
  We were not paying off debt under Clinton. http://research.stlouisfed.org/fred2/graph/?id=FYGFD http://research.stlouisfed.org/fred2/graph/?id=FYGFD We were merely reducing one kind of debt, namely debt held by the public. Total debt continued to increase.
  • gbhn 15y ago
    http://www.treasurydirect.gov/NP/BPDLogin?application=np http://www.treasurydirect.gov/NP/BPDLogin?application=np This site records debt to the penny, daily. There's a fair amount of up and down in such a measure, as you might expect. There are certainly (long-ish) periods during Clinton's presidency where the total debt, as well as debt held by the public, decreased from the day at the start of the period to the day at the end.
  • yequalsx 15y ago
    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".
    • yummyfajitas 15y ago
      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 http://research.stlouisfed.org/fred2/data/FYGFD.txt
• Newgy 15y ago
  The Gingrich Congress, not Clinton, controlled spending and gets most of the credit for the improved budget situation. That plus tax revenue from a massive tech bubble.
  • jbooth 15y ago
    http://www.usgovernmentspending.com/spending_chart_1992_2011USk_10s1li011lcn_F0t_Total_Spending#copypaste http://www.usgovernmentspending.com/spending_chart_1992_2011... Spending increased more slowly from 92-94 before the Gingrich congress came to power, than it ever did afterwards. And Clinton didn't have to shut down the government to do it.
    • rationalbeats 15y ago
      Clinton never shut the government down. Clinton did not have the power to shut it down. Why are you changing history? I don't understand why people do that.
      • ajross 15y ago
        You misread. He means that the republican congress failed to reduce spending as fast as 92-94 even though they shut the government down.
      • NoPiece 15y ago
        The congress passed continuing resolutions that would have kept the government running. President Clinton vetoed the resolutions, so there was no money for operations. That caused major portions of the government to shut down. unless you are really trying to parse the words, I'm not sure why it isn't fair to say Clinton shut the government down. http://en.wikipedia.org/wiki/United_States_federal_government_shutdown_of_1995_and_1996#Event http://en.wikipedia.org/wiki/United_States_federal_governmen...
    • OstiaAntica 15y ago
      Gingrich passed a rescission bill that retroactively cut money from the 1994 budget.
• nextparadigms 15y ago
  Ron Paul wants to cut $1 trillion in the first year, and end the wars. That would go a long way to paying off the debt. Plus he was against increasing the debt limit, so he's the only one who truly realizes the debt problem, and that the country might implode if they keep spending as they do, with no cuts whatsoever.
  • shareme 15y ago
    Ron Paul is somewhat an illogical idiot.. ever hear of the 1920s crash? We got out of that situation by guess.wait for it.. debt spending in ramping up to fighting WWII..
    • Uhhrrr 15y ago
      You do know that there was an interval of twelve years between the Crash of '29 and our entry into WWII, right?
      • jellicle 15y ago
        Not sure what your point is. The Great Depression didn't end for the U.S. until World War II had begun and the U.S. had embarked on a massive public spending program - buying weapons.
        • skylan_q 15y ago
          GDP rose during the war, but it felt like a depression. What good is an increase in GDP if basic foodstuffs need to be rationed and people are getting killed? The recovery actually came in the post-war boom when government spending was slashed and 5 million people left military operations and joined the civilian workforce.
          • cwp 15y ago
            Right. So ideally, we want a big public spending program without a war.
• akmiller 15y ago
  Yes, the economy was soaring thanks to the technology and housing boom. You can pretend that our economy revolves around who's president and what political party system they belong to but no matter how hard you pretend it still isn't true.
  • betterth 15y ago
    Don't be dense, the parties have a lot of power in the economy. The crash of 2008? Many economists wisely point to Republican-led market deregulation, notably the repeal of Glass-Steagal in 1999, as the causes. Considering that Democrats fight for stronger regulation and pass them (Dodd-Frank... even if that one is DOA), while Republicans fight for deregulation, it's a bit off to imply that the party has no effect on the economy. That's a huge ideological difference and one that has significant effects on the economy, even in the short-mid term.
    • akmiller 15y ago
      I agree that they have power but as I said above that power is usually not felt immediately. My top comment comes off like I'm a big time republican and that couldn't be further from the truth. I just want to point out that the great economy that Clinton benefited from was not his creation. I tend to agree that some of the deregulation did contribute to the crash in 2008. Some of that same deregulation also, very likely, contributed to the boom in the early 2000's.
    • yummyfajitas 15y ago
      Many economists wisely point to Republican-led market deregulation, notably the repeal of Glass-Steagal in 1999... Um, Gramm-Leach was supported by a majority of both Dems and Reps. Clinton signed it. The only major dispute between the parties was over whether to make CRA compliance a precursor for banking mergers. (I.e., banks can't merge or acquire if they don't lend to enough minorities.) As far as I know, Bush's main forays into finance were Sarbox (increasing regulation), his ill-fated attempts to more strictly regulate Fannie and Freddie, and various laws pushing more people into homeownership (again, increasing regulation). Could you point out any acts of Republican-led market deregulation, ideally from the past 10 or so years?
• mmphosis 15y ago
  Angry voters? George W. Bush Al Gore Popular vote 50,456,002 50,999,897
  • sigzero 15y ago
    As bad as Bush was...Gore would have been a disaster.
    • drumdance 15y ago
      He would've continued the <a href="http://www.theonion.com/articles/bush-our-long-national-nightmare-of-peace-and-pros,464/>nightmare</a> http://www.theonion.com/articles/bush-our-long-national-nigh....
      • ericd 15y ago
        If that posting date is accurate, that's eerily prescient. Also, a link that works: http://www.theonion.com/articles/bush-our-long-national-nightmare-of-peace-and-pros,464/ http://www.theonion.com/articles/bush-our-long-national-nigh...
    • kleiba 15y ago
      I like the way you think! Good argument.
• Lambent_Cactus 15y ago
  You could still issue treasuries. As long as we're not experiencing deflation (the Fed is supposed to target 2% inflation), there's plenty of room for the government to borrow money at negative real interest rates, which it should be happy to do even if running surpluses. Other countries deal with surpluses with sovereign wealth or rainy day funds, but you could just as easily envision rebating a surplus as fully-refundable tax credit "dividends".
  • bzbarsky 15y ago
    The Fed is doing a miserable job of targeting 2% inflation if it's supposed to do that. Even in the face of a week economy and so forth, it's barely managing to hit 1.5% for inflation expectations. Then again, they don't actually have an official inflation target, so... I see no reason the Fed wouldn't go for outright deflation if they thought they could get away with it. They seem to be really happy with their current tight money policy. :(
    • atsaloli 15y ago
      I don't know where this 1.5% inflation figure is coming from. I am seeing a 10-40% (or more) increase in food prices when shopping for groceries. Bottle of hydrogen peroxide used to cost $1.69 a year ago, now costs 2 dollars. I don't belive this 1.5% figure, it does not match what I observed. Think about it, how could it be that it is only 1.5% inflation when the size of the money supply is doubled or tripled?
      • Raphael 15y ago
        The "amount" of money is the total outstanding dollars multiplied by the number of times it changes hands (the "speed"). When the economy slows down, the government borrows money and spends it on stimulus, where they hope it will circulate, changing hands as many times as possible.
      • tsotha 15y ago
        It's a little more complicated than that. For one thing, people use the word "inflation" to mean two different (but somewhat related) things. When you or I say "inflation" what we really mean is an increase in the cost of living. But even beyond that everyone has a different cost of living - I bought a house this year, and I paid about half what I would have paid three years ago. When the government reports CPI this is part of the calculation. For the Fed, "inflation" means an increase in the overall money supply. You get an increase in the money supply when people borrow money, and you get a decrease in the money supply when people pay off (or default) on loans. In a macro-economic sense we've been going through a period of pretty severe deflation since the housing market crashed, which is why the Fed is desperately pumping money into circulation. For all the gory details see here: http://globaleconomicanalysis.blogspot.com/2008/12/humpty-dumpty-on-inflation.html http://globaleconomicanalysis.blogspot.com/2008/12/humpty-du... tl;dr: You can have a rise in the cost of living and deflation at the same time, just like you can have stable prices during inflation. p.s. If you don't understand why the money supply increases when people borrow, this is a good (though a bit dramatic) primer: http://video.google.com/videoplay?docid=-2550156453790090544 http://video.google.com/videoplay?docid=-2550156453790090544
• ma2rten 15y ago
  The banks could not only have done more risky investments. Americans seem to keep forgetting that they are not the only country in the world. American bank can still invest in foreign bonds. There are other countries which also happen to have a better security rating at the moment, you know?
• nhaehnle 15y ago
  > By the way that report is absolutely wrong. Nothing terrible would happen if we paid off the debt. So there wouldn't be federal treasuries. BFD. Depends on what you mean by paying off the debt. If you pay off the debt by just issuing a sufficiently large amount of reserves at the Fed to do so, then yes, I would agree. Then you just transform one form of government liability (treasury bonds) into another form of government liability (reserves). No problem there. But if you're actually talking about eliminating net government liabilities, you're missing the point. Here's why: Individuals in the private sector want to accumulate net financial assets, if only to save for retirement. Every financial asset is somebody else's corresponding financial liability. But retirement funds & co. are huge. Who is going to incur the necessary net financial liabilities to correspond to them? Private entities? Why would we allow private entities to run up that much debt? Also, with private entities you always have the problem that people might change their mind about their credit-worthiness. The federal government, on the other hand, is at the top of the pyramid of liabilities (see e.g. here: http://neweconomicperspectives.blogspot.com/2011/09/mmp-blog-15-clearing-the-pyramid-of.html http://neweconomicperspectives.blogspot.com/2011/09/mmp-blog...), and they can easily incur and sustain the required net financial liabilities to allow the private sector to save in net financial assets. So government liabilities play an important role in the stability of the financial system. If you run down the federal debt, you end up in a situation like the Eurozone, where the entity at the top of the pyramid of liability (i.e. the ECB) does not incur sufficient liabilities (and in fact, does not have the mandate to do so, for good reason) to support a stable financial system. The debt crisis is a direct result of this flawed setup, and you would be wise to avoid copying it in the US.