Which only means that if spending HAD been cut, the surplus would have been greater.

The idea is in part, obviously, to have surpluses lying around for rainy days. Regardless of what Clinton did (and I'm not confident he would have kept the surplus intact), Bush's policies drove the deficit way up, and when the recession hit we were in a hole and had to keep digging.

Yeah, I was thinking the same thing. Spending should be based on some sort of moving average so that we might go into some debt during bad times, but build a reserve up during the good times to mitigate that.

No, he balanced the budget if you're the government and can fudge numbers to make them say what you want them to say.

http://www.craigsteiner.us/articles/16

Edit: Nittery aside, though, spending less is good I agree. That's not going to happen.

This.

FY........Year Ending..National Debt.......Deficit
FY1993 09/30/1993 $4.411488 trillion
FY1994 09/30/1994 $4.692749 trillion $281.26 billion
FY1995 09/29/1995 $4.973982 trillion $281.23 billion
FY1996 09/30/1996 $5.224810 trillion $250.83 billion
FY1997 09/30/1997 $5.413146 trillion $188.34 billion
FY1998 09/30/1998 $5.526193 trillion $113.05 billion
FY1999 09/30/1999 $5.656270 trillion $130.08 billion
FY2000 09/29/2000 $5.674178 trillion $17.91 billion
FY2001 09/28/2001 $5.807463 trillion $133.29 billion

Eliminate the deficit. Only by using excess SS revenue to fund govt programs instead of the mythical SS "lock box" was eliminating the deficit for one year possible. IIRC 2000 was a record year for fed govt revenues as percentage of GDP. Capital gains realized from the stock market on top of tax revenues from a growing economy made it happen. Not something that happens regularly.

Come on..... Clinton said it over and over, it must be true.

Well, I guess that I'll stick by my original claim. Steiner's argument relies on defining the word "deficit" differently than the CBO, the media, the government, the CEA, and seemingly most economists. It seems to me that these are the organizations best placed to define such terms and since I ordinarily rely on them to do so, it seems intellectually dishonest to not do so here without good reason (which I don't think Steiner provides).

That being said, it really doesn't matter that much what exactly we mean by "deficit." If you wish to use your definition, and thus deny that Clinton balanced the budget, fine. But even under your definition, I can still say that during the Clinton years the deficit was lowered, which is good enough for me.

If you ignore the phony accounting for social security, there were no surpluses.

Here's the good reason: the accounting for social security is completely misleading.

Suppose we engage in the following contract - I promise to pay you $100 in 10 years if you give me $60 today. When I disclose this on my personal financial status for the year I show the following:

Assets = Inflows - Outflows = $60 - $0 = $60

Is this a meaningful presentation of my financial status?

Yes, it is time.
But it´s not possible as long as the Federal Reserve exists.

Maybe I wasn't clear enough--I don't mean a good reason to think Steiner's way of defining "deficit" is good, but rather to think that I shouldn't trust these expert sources that I ordinarily trust for these types of issues. I am not an accountant or economist and so am not qualified to judge the best way to understand "deficit." Insofar as this is a linguistic issue--whether we should understand "deficit" in the standard way or in the Steiner way, I will go with the experts. And since there is no disagreement in substance--Steiner doesn't argue that there is actually more debt or spending or taxes or anything than is accepted by the experts, I don't see much point in arguing this point.

But that is what I gave you - a simplified example of the (transparently stupid) way that governments account for pension promises and that, if corrected, eliminates all the supposed surpluses.

.

Either way we can agree that those years were BETTER than the surrounding years, yes? So that's very good. I don't want to get sidetracked on this point any longer, so let's go back to your original post that got this started:

Looking back, was the 90s fueled by economic growth or was it the APPEARANCE of economic growth?

Notice immediately after Clinton is gone, the debt starts ballooning again. (Before Bush's budgets even kick in) The late 90s were an outlier along an otherwise long record of more spending and debt.

No. You gave me a reason to think these experts are wrong in this case--not a general reason for me to not rely on them. Since, as I said above, I am not competent to judge if you are correct on the merits of this example, I'll continue relying on the standard terminology. But let's drop this terminological dispute and focus on the substantive issue, yes?

Good.

I know a few people have argued that the 90's economic boom is/was in reality a finance bubble. Maybe they're right, but I'm unconvinced. Unlike the aughts, at the end of the nineties, we saw growth in jobs and in real median income. Anyway, what do you think?

This is not quite true. I mean, you are correct that the debt increased immediately after Clinton left office--too quickly to ascribe it initially to GOP policies. However, the Bush administration policies (Iraq/Afghanistan wars, Medicare drug benefits, tax cuts) made this normal increase much greater than it otherwise would have been. But I think you agree here anyway.

But I think it is misleading to say that we do not have a "long record of more spending and debt." Since WWII, the national debt as a percentage of GDP has declined under every president except Reagan and the Bushes. If you look at this chart, you see that the national debt in the U.S. is caused primarily by wars, depressions and tax cuts. Tax cuts we can avoid, depressions don't happen as a matter of policy, and wars, well sometimes we can avoid those, but generally not for budgetary reasons. In short, there is not a necessary connection between U.S. government and fiscal irresponsibility.

In my view, that the numbers are bad AND severely understated is a pretty substantive issue, but I will just bow out and allow you to pursue the line of reasoning you wanted to pursue.

There's no doubt that the 90s were a great time. The internet changed everything, especially in business. Suddenly it was feasible to have the ENTIRE WORLD as your customer base! Many great ideas were brought to the forefront of our lives. Other bad ideas lost people a whole lot of money.

So there's no doubt that "average" people were better off almost every year of the 90s than they were the year before. Cheap money flooded the system, and customers were able to offset the loss of purchasing power of the dollar by shopping more directly to the source (Amazon, Wal-Mart) and getting cheaper prices.

However that growth predictably stopped when we ran into the next set of barriers. You can run an online book site and ship worldwide, but you're still constrained by the fact trucks can only go so fast. You can digitize your data, but you're still constrained by the people interpreting that data. And so the growth slowed.

I do agree, but an important point is that politicians aren't stupid. They know you can fudge around some budgets here and there and have taxes here and there to get the appearance of a "balanced" budget. All the while those "gains" just have their losses spread out to other years to make this period (Oh hey right before an election!) look like everything's going great.

I think that GOP policy WAS important in the 90s, because they were on the outside looking in. That's what they do best, because they can actually stand on principles. As you mentioned, it's a much different story when they actually grab the reigns.

First, I think it's disingenuous to use the highest point of debt ever because of the greatest world event ever and use that as a starting point.

I'm not even sure what this:

is supposed to mean. There's no one else with the ability to be so irresponsible.

I am not sure if I agree with this (I mean this genuinely--not just as a way of expressing disagreement). The GOP used to be the party of fiscal conservatism, but now they seem to be more focused on cutting taxes at any cost. My worry is that this makes it nearly impossible for any politician to raise taxes, which will likely be necessary if we are to balance the budget. Anymore, I think the positive effect the GOP has on the process is acting as a brake on spending--not helping balance the budget.

Fair enough. Let me rephrase. Throughout the entire history of U.S., we see a consistent pattern of declining national debt as a % of GDP, except in crisis situations. The only exceptions are due to WWI, the Iraq War, and the fiscal policies of the Reagan/Bush years. I don't think it is accurate to characterize this history as a "long record of more spending and debt."

I was trying to disagree (obviously unclearly) with your characterization of the behavior of national government. You seemed to be expressing a fatalistic attitude towards poor fiscal policy. Perhaps I was reading too much into what you were saying though, so I'll just drop it.

But that's the most important part in balancing the budget. The GOP couldn't get any of their bull**** spending through, so they just clogged up the whole system. When they CAN get their bull**** spending through.....

I think we just have to agree to disagree here, since I believe the "declining" of the % is just due to the huge % we're starting out with (WWII). There's certainly nothing to suggest we're STOPPING the spending and debt, do you agree?