Overlooked Facts on Clinton’s Budget Surplus

Reading posted comments on the internet can be quite frustrating.  It not only indicates how many highly opinionated commenters are greatly mis-informed, it also indicates how much damage the main stream media has done to the truth and common sense.

I noted a post Yesterday on a CBS poll where a commenter suggested that the country had a surplus when President Clinton left office and President Bush generated 12 Trillion dollars of debt in only eight years.

News flash to the uniformed.  Only one President in the history of our nation paid off the public debt.  That was President Andrew Jackson.

When President Clinton left office this country owed Trillions in national debt.  The budget surplus Democrats often refer to was the difference in the amount the public paid in taxes and what the government spent.  In other words, the government spent less than what it took in.  It did not however pay off the debt.

Now, to the Clinton surplus.

Those of us with long-term memory will recall the savings and loan scandals that plagued our nation during the 80s.  President Reagan pushed for a law to bailout the savings and loan industry.  He also demanded the laws be changed to prevent a reoccurance of the problems that lead to the failure of the savings and loan industry. 

In effect President Reagon signed into law a new set of standards that the savings and loan industry had to accept to get the necessary funding to stay in business.  The law required they pay the loaned monies back to the taxpayers.

When were these monies paid back?  You guessed it, during the Clinton Administration.  Clinton benefitted by having funding in addition to the taxpayer funds.

Another item often overlooked by Democrats and political pundits when lauding Clinton’s budget surplus is a man named Newt Gingrich and the Contract With America.

Again, those of us with long term memory will recall the public battles, the shutting down of the government and main stream media interference in regards to the national budget. 

Eventually, Gingrich and Clinton developed a private working relationship.  During they day they would snipe at each other in public.   However, in the evenings, out of the public eye, they would meet at the Whitehouse and work out solutions with each other.

This was a great working relationship while it lasted.  It gave us a balanced budget, welfare reform, etc..  Who knows how far they could have gone if both of them could have remained faithful to their spouses.

Lastly, and again unnoted, President Clinton had the fortune of being elected at the close of the Cold War.  He was able to cut the military budget, draw down military forces, cancel military contracts for future weapons and divert the monies elsewhere. 

As often happens in any president’s tenure they make policy decisions that benefit their timeframe and create problems for future administrations.  President Clinton’s gutting of the military logistics corp provided a huge stumbling block for President Bush when he was deploying forces to the Middle East.

While President Bush was lambasted in the press for the cost of contracting in regards to the war effort.  No one in the media pointed out the fact that the contracts may not have been necessary if President Clinton had not destroyed the military logistics corp leaving our military dependent on contracts for transportation, fuel, ammo, water, shelter, equipment maintenance, basically everything needed for war, but the servicemen themselves.

So yes there were budget surpluses during the Clinton Presidency.  But, much of this had to do with timing.  He was fortunate in that the cold war ended, the Republicans took over the house and most of all, he was fortunate that Hillarycare went down in flames.

I would also like to note that during the recent melt down of our financial industry, savings and loans were generally unaffected.  Could it be that President Reagan did something right that our current administration could learn from? 

There has been little interest by this administration to correct the policies that allowed Fannie Mae and Freddie Mac to break the back of the American Economy.  In fact, they are doing just the opposite.  They are pushing the banks to go back to the same lending practices that created the financial meltdown in the first place.

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7 Responses to Overlooked Facts on Clinton’s Budget Surplus

  1. that is really interesting. I was in my 20’s during the Clinton years, and too involved in my own life to think any of it mattered, so I’m glad someone was paying attention and will remind those like me.

  2. Tex Taylor says:

    Even with the serendipity of presiding over the ’90s, I can’t find where Clinton ever ran a surplus. If so, it had to be 2000 at the tail end of an internet bubble that haunted George Bush from day one of his inauguration.

    This supposed Clinton surplus is one of the biggest lies propagated by the left:

    http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm

    • Steve says:

      Ah, Tex, you nailed it! Finally, someone else sees it. On Jan 4, 1999 the nasdaq opened @ 2207. It almost doubled in that year to close @ 4069 on Dec. 31. One year later it closed out 2000 @ 2470. At the “Clinton Tax Rates” recently quoted, could you imagine the wealth effect of 1999, which got taxed and received in 2000? Large! Then when Clinton left office the nasdaq was all the way down to 2470. That was received as tax revenue in 2001 when Bush became president, but remember, it was 2000, Clinton’s last year in office when the revenue was incurred.

      The bottom line? The nasdaq bubble was a tax receipts bubble. If Clinton can take credit for the surplus, he MUST take credit for the bursting of the bubble as well, and so the deficits that followed.

  3. Jim Thomas says:

    I find this post to be somewhat factual. But, definetly not entirely.

    First you need to look up what the difference is between national debt and budget deficit is. Second, In fiscal year 2001 Clinton left with their being a surplus. But W. comes in and passed a $1.35 trillion tax cut program—one of the largest tax cuts in U.S. history. Bush argued that unspent government funds, should be returned to taxpayers, we should have began paying off the deficit. What a moron!!!

    Then the 2003 Iraq War is the only time in the History of the US that we ever went to war and didn’t raise taxes to fund the war. In fact W had taxes lowered that same year with his 2nd tax cut.

    Finally you claim that Clinton was to blame for the extra large deficits that Bush racked up because Clinton didn’t properly fund the troops while he was in office. If Bush43 didn’t send troops to Iraq and get us into an ill advised war that was not necessary. He wouldn’t have needed the guns, ammo, fuel & shelter.

    • SirKnob says:

      Hello Mr. Thomas, thank you for the comments.

      To begin, I know the difference between deficit and national debt. The only President to pay off the national debt was President Andrew Jackson.

      Second, the subject of this post was the claimed President Clinton surplus. The one thing I failed to mention was how President Clinton benefited from the dot.com boom.

      Since you brought it up, when President Bush took office the economy was in recession. His tax cuts had an immediate impact and the deficit was reduced to aprx 200 Billion by 2006.

      Taking into account that our economy had taken a Trillion dollar hit as a result of 9/11, we were involved in two wars and the government was not practicing fiscal restraint. I would say that was pretty darn good.

      It was the low income housing act, put on steroids by President Clinton, the actions of Fannie Mae and Freddie Mac that were largely responsible for the 2008 crash.

      Had Clinton not gutted our military, had he kept his promise to track down and punish the people who attacked us over a dozen times during his administration, maybe 9/11 would not have happened, maybe the two wars would not have happened either (but the housing crash would have).

      Basically, the best defense is to have the strongest offense and a will to use it.

      We could discuss the war in Iraq at length, but needless to say, hundreds of tons of yellow cake uranium, thousands of gallons of chemical agents, nerve agents, mustard gas, chinese missles without warheads, etc… are no longer available to the terrorist that want to kill us.

      I note that you brought up the Bush tax cuts which put money into the hands of people and the economy, but you did not mention the Trillion Dollar Obama stimulus which paid back his socialist billionaire benefactors, wall street billionaires, foreign banks and special interest groups, while ignoring main street and our 10% unemployment.

      Simply put, the stimulus did nothing that was promised, the Bush tax cuts did.

      In closing, I think the one thing that we can definetly agree on is that the government is to big, spending too much money, there is too much waste and our nation’s wealth is being stolen, while our children’s future is being sold in order to support government programs that give back less than 5 cents on the dollar.

      We need to get a handle on the deficit and we need to pay off the National Debt.

      Again, thank you for the comments, I hope you have a great day 🙂

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