July 20th, 2008The United States Has Not Had A Balanced Budget Since 1957!
In September 27, 2000, CNN wrote that that:
the federal budget surplus for fiscal year 2000 amounted to at least $230 billion, making it the largest in U.S. history and topping last year’s record surplus of $122.7 billion.
I’m not sure where CNN finds their White House correspondents, but they obviously know nothing about government accounting. CNN is not the only clueless news narrators of course; MSNBC, The New York Times, ABC, CBS, USA Today and virtually every other national news agency got it wrong then, and continue to get it wrong today.
Here is a tip for the mainstream news agencies: when reporting on US government budgetary issues, check the source. The source I’m referring to is the US Government’s Treasury Direct website. For all the pilfering the US government does of the tax coffers, at least they are honest about it. They accurately and honestly report the largest accounting scandal in world history. CNN just doesn’t understand the numbers.
As of July 17, 2008, the current US Government Debt is nearly 9.518 Trillion dollars. From the Budget of the United States historical tables (pg 31), the United States tax revenue for fiscal year 2007 was only 1.86 Trillion dollars when the social insurance and retirement receipts are subtracted out. For those of you who think that your money is 100% safe in United States treasuries, consider the fact that the debt to revenue ratio of the United States treasury is over 5 to 1! (9.518 trillion total debt divided by 1.86 trillion in tax revenue).
Looking back, here are the historical US government debt numbers from 1986 through 2007:
Bill Clinton was president of the United States from 1993 to 2001 and although he made significant progress toward fiscal responsibility, he did not balance the budget. If you don’t believe me, (that means you CNN!), then kindly point out two consecutive years in the table above where the total US debt actually decreased from year to year.
Here is another view of some of the historical debt numbers, and the corresponding annual deficits. As you can see, the United States has not had a balanced budget since 1957, the year that Dwight Eisenhower was in office.
So how do CNN and so many others repeatedly and incorrectly report of budget surpluses? They simply do not comprehend the numbers. The US government debt is broken down and reported in 2 components:
- Debt held by the public
- Intragovernmental holdings
The number that matters is the TOTAL of the two components above!
Before going further, let’s take a step back and consider the analogy of an 4 member household. Jack and Jill are married and have two kids. Together they have a total income of $65,000, but expenses are high and they spend a total of $70,000 per year. The annual budget deficit of this household is $5,000, which they finance on 2 credit cards – Jack’s Visa and Jill’s Mastercard. During the past year year, Jack paid down his Visa balance by $1000 (surplus) but Jill increased the balance of the family mastercard by $6000 (deficit). CNN ignores the Mastercard and reports a $1000 budget surplus for the Jack and Jill family!
Back to the United States. Why do they separate the total US debt into two components – debt held by the public and intragovernmental holdings? It’s because the current demographics of the United States make it convenient for them to hide the truth of their Enron style accounting from the American Public:
In 1960 there were 5.1 workers paying into social security for every 1 worker collecting a benefit. That ratio is gradually declining and is expected to hit 2.1 workers per retiree by the year 2032. The current demographics of the United States are causing social security surpluses, but over time those surpluses will turn into deficits.
The social security surplus for fiscal year 2007 was $283 billion dollars. Rather then investing those surpluses for future retirees, as every other American pension system is required to do, the United States budget office “borrows” the surpluses and records them in an Enron style fashion as “intragovernmental debt”. This trick lowers the reported deficit on the “Debt held by the public” side and increases it on the “Intragovernmental debt” side (see VISA and Mastercard analogy above). The trick is also very effective in fooling CNN (not hard to do!), who only looks at easy to read one page reports such as the Joint Statement of Henry M. Paulson, Jr., Secretary of the Treasury, And Jim Nussle, Director of the Office of Management and Budget, on Budget Results for Fiscal Year 2007. But the trick will only work until the United States demographic time bomb completely explodes, and the social security surpluses turn into social security deficits. I’m very curious to see what new tricks the United States budget office comes up with when that happens!
According to the joint statement report, the fiscal year 2007 budget deficit was only $163 billion dollars. In actuality, when you add in the pilfered social security surplus of $283 billion, plus other United States pension system raids (other federal government worker retirement programs), the 2007 budget deficit was actually $500.7 billion dollars, and not the $163 billion dollars that news agencies report from the joint statement. The total US Government debt did increase by $500.7 billion dollars from September 2006 to September 2007. 1957 was the last time the United States recorded a true surplus, where the total outstanding debt decreases from year to year. Thank you Mr. Eisenhower! As for the CNN reported $230 billion surplus for fiscal year 2000, it was actually an $18 billion deficit. Although still in the red, that too is deserving of my thanks to Mr. Clinton. He may not have achieved balance but he came pretty darn close!
For additional reading, I recommend the following:
The National Debt of the United States 1941 to 2008, 2d ed by Robert E. Kelly
One Nation Under Debt: Hamilton, Jefferson, and the History of What We Owe by Robert E. Wright
July 20th, 2008 at 11:14 pm
So it’s basically worse than everyone thinks it is. And how much surplus does China have? It has got to be in the trillions. This is the biggest threat to US prosperity; not global warming or Al Queda or Iraq. The next Pres is gonna have to make this a priority.
August 3rd, 2008 at 11:02 am
Not only is the total debt increasing it is doing so at almost an 8% rate year over year since 1970. If the minimum wage had increased in this manner for 38 years it would be over $30. an hour. Think of it with employees working hard year after year for a 2 or 3% raise the govt. has been going in the hole at better than twice that rate. Tax tables are not adjusted for inflation so the govt. gets an automatic raise from eveyone every year. Its not a simple mattter of finding efficiencies anymore. We , the govt, has to rethink what we are paying for. You may be able to cut $ 20 billion here or there. Whats needed is to describe a government that is $400-500 billion dollars smaller and over time reducing the national debt to a healthier figure. Debt as a % of gdp was down to 33% in the early 60s now we are over 66%. If interest rates were to rise in the future the interest would cripple future spending.
August 21st, 2008 at 11:18 am
Hi DavidO, it seems to me there are three approximately equal threats:
1) The exploding debt
2) Climate change
3) Perpetual war, which will inevitably turn global and nuclear unless it is stopped. Terrorism is not the threat; our response to terrorism is the threat.
Any one of these three has the potential to take down our civilization as we know it.
August 21st, 2008 at 11:42 am
Absolutely. We have some serious problems and we need to address them. The reckless government finance engine can only sustain itself for so long, and then we are just another Weimar German Republic, or Zimbabwe.
October 25th, 2008 at 5:12 pm
Thanks for getting this information out there, I only wish it were recognized by the mainstream media. I checked the Treasury website for the total deficit as of 9/30/2008 ($10,024,724,896,912.24) and 10/23/2008 ($10,524,112,985,802,87). That translates to a deficit for FY 2008 of over $1T, and another $500B since the beginning of this month.
Using the Social Security surplus to artificially reduce the deficit numbers is sinful, especially when you consider that is an effective transfer of wealth from future SS recipients to the high income people today that are the prime beneficiaries of the Bush tax cuts.
Soon there will be no SS annual surplus, and the SS expenses will have to be “recovered” from the General Budget – what will that do to the reported deficit?
November 16th, 2008 at 9:08 am
Joe…please check out the GAO report published recently…I believe it reported that “no President has taxed the rich more than George W. Bush”…sometimes things aren’t as they appear are they?
January 9th, 2009 at 2:18 pm
Please give your figures in inflation adjusted dollars as well – using absolute figures is obviously misleading. (After accounting for inflation, Bill Clinton might very well have achieved the reduction at least once).
An interesting article might also compare the debt as a proportion of (1) total government revenues and (2) GDP.
Also, you skipped the intermediate years. Last time I checked a few years ago, Lyndon Johnson ran a true budget surplus (without stealing from SSI). Older folks might recall that in the face of the costs of the Vietnam War, he (well Congress actually) imposed a flat 10% temporary surcharge on income taxes. It was simple, no new wrangling about special exemptions or reduced deductions – just use the old system’s rates plus 10%. This temporary surcharge paid for the extra costs of the war (well at least the immediate ones – veterans benefits come over an extended period) and actually eventually produced a budget surplus, at which point the temporary tax increase was rescinded as promised.
The only thing worse than “tax and spend” liberals like Johnson is “borrow and spend” conservatives like Bush.
January 9th, 2009 at 5:51 pm
Private Worker: The trouble with inflation adjusted dollars is that there is no way to accurately measure REAL inflation. I’m certainly not going to trust the government reported inflation numbers.
Most economists do talk about debt as a comparison to total GDP. Those numbers are useful for comparing our debt burden to that of other countries. But to forecast our ability to pay our own debt, the more meaningful relationship is our total government revenue vs the existing national debt.
You are right, I skipped a few years because I wanted to showcase 1957. But I did provide the link to the historical debt tables. Lyndon Johnson took over in 1963. The total debt was $305 billion. Per the tables from the link I provided, the total debt increased every year from 1963 to 1970, and was $370 billion in 1970.
You can check the historical debt tables link provided to verify for yourself, but it is true that 1957 was the last time the debt DECREASED.
January 9th, 2009 at 5:55 pm
Also, I have no comment on your “tax and spend” vs “borrow and spend” remark. I appreciate the comment, but my article was an objective look at the real debt numbers. I mentioned Eisenhower simply because he was in charge in 1957, and not due to his political persuasion.
January 18th, 2009 at 4:05 pm
Legislatures spend our tax money, presidents receive the glory or the grief, and the saddest part is we elected them all. Think about that the next time you look at your pay stub.
January 21st, 2009 at 1:37 pm
The white elephant in the national debt room is the “Federal” Reserve Banking system. These private (NOT “quasi-public”) banks were installed in 1913 after banksters bought off our politicians during a Christmas break, and given Congress’ constitutional authority to issue currency. As a result, the biggest chunk of the national debt is owed to these private banks, who issue money and lend it to the U.S. government at interest. To pay for this interest, the federal income tax was passed back then as well. Get rid of the Fed and let the government issue currency at low interest rates… this would result in the elimination of the federal income tax and the government can be funded with the interest money it receives from loaning to banks.
February 12th, 2009 at 12:04 pm
You made some good points there. I did a search on the topic and found most people will agree with your blog.
February 22nd, 2009 at 11:30 pm
[...] spending for this country. The debt is the cumulative total of all past deficits and surplus (not since 1957 have we had one!). Further, the goal of “cutting the deficit” is no more admirable than a serial [...]
March 11th, 2009 at 1:23 am
Is it a good time to be doing this now?
March 11th, 2009 at 7:27 am
By “doing this now”, I assume you mean balancing the budget now? Modern economic theory does encourage deficit spending in times of recession to help smooth out the economic cycles and dampen the effects of a recession. However, that same theory states that during times of economic expansion, the cumulative government debts MUST BE PAID DOWN. This is WHERE WE FAILED AS A NATION. We oversspend like drunken sailors – in good times and in bad. And this is WHY it is SO DIFFICULT to get a large enough stimulus going. We simply don’t have the resources to do what is necessary because we are tapped out.
June 9th, 2009 at 9:33 pm
Linnaeus. Terrorism is a threat. 3,000 dead are an attestment to that. Do you think that by doing nothing that AL Queda will stop??Do you think that such people can be reasoned with?
If so, than we’ll call you Neville because there is no reasoning with such people and the only way to deal with terrorism is with a mixture of brute force, legal action, and to find a way to change the conditions which created them.
In my opinion, YOUR response is as big of a threat to peace than what Bush did. If a government did as you suggested–nothing–violence would escalate even more because the terrorists would understand that that there is no consequences for their actions. Tucking youir head and acting like nothing is wrong is not a solution to the problem. Permitting a criminal to get away with an act because you loath the solution is a) incompatible with human instinct and b) makes one complicit in the initial crime.
War has been around since the beginning of mankind. Nothing you or anyone else will do can change that. Violence is apart of our DNA. Liberals think war just came on the scene in the past 50 years. It didn’t. It predates every economic and political system that we know. It goes back to the very beginnings of human civilization.
You need to live in the real world, Lanneause. You have to comprehend the limitations of man.
July 13th, 2009 at 5:22 am
@Linnaeus:
“Any one of these three has the potential to take down our civilization as we know it.”
1) and 3) I agree. But, the “climate change” (aka “new ice age”, aka “global warming” …) I do not. Check the facts – it’s nothing but a hoax from the discredited socialist/utopian manual:
http://www.garynorth.com/public/5156print.cfm
@Ceaser:
“to find a way to change the conditions which created them.”
Maybe stop the perpetual meddling in other people’s internal affairs (e.g. regime change in Iran in the 50s, Iran/Iraq war and Afghanistan in 80s etc) would do. Remember, Saddam and bin Laden are ex U.S. buddies, our own creatures, recruited, trained and armed by U.S. taxpayers money. Not to mention that all our overseas adventures are charged on the credit card. How long do you think world will keep financing the crusades of a bankrupt empire?
August 26th, 2009 at 11:29 pm
You have to admit, nominals can be misleading. It reminds me a little of statistics…averages(mean) can easily mislead one who has not observered the median.
Your comment of
“Private Worker: The trouble with inflation adjusted dollars is that there is no way to accurately measure REAL inflation. I’m certainly not going to trust the government reported inflation numbers.”
Seems kind of shady to me. Just because you don’t trust the government’s numbers doesn’t mean you should not account for it in some way. In order to have not only an accurate but meaningful representation of debt, inflation has to be taken into account. Whether or not you believe in the government’s account of inflation is besides the point, the reality is that it does exist and must be accounted for in some fashion.
So looking at those figures between 1999 and 2000 the debt increased nominally by .3% If you think inflation for that year was below .3% or that this year exhibited deflation then you’re right, Clinton didn’t get it done. Otherwise some balance was achieved. To what extent is up for debate.
Not saying this is the end-all-be-all indicator, but going by CPI inflation between 1999 and 2000 was over 3%. This means that Eisenhower balanced the budget even more so, since the period between 1956-57 had an inflation rate of about 3.3%
Additionally, inflation from 1963-1970 was almost 27%, while the nominal debt increased by about 21% during that same time, meaning some REAL balancing took place.
http://en.wikipedia.org/wiki/United_States_public_debt
August 27th, 2009 at 9:37 am
Good point Mike. My problem with measuring this “real” increase in debt – growth of debt vs growth in inflation – is it makes it to convenient for politicians to excuse their wasteful spending. Also, if we take Obama’s first term into consideration, inflation is near zero (at least for now), yet the national debt is increasing at $2 trillion per year so far. And on that note, the annual increase in total debt is what I term “deficit”. Our annual budget deficit as of now is about $2 trillion, not the $1 trillion reported by the media, which only takes one of two accounts into consideration.
Also see:
http://www.geldpress.com/2008/07/us-budget-reporting-deception/
September 5th, 2009 at 4:58 pm
IS EVERYONE FOREGETTING THERE WAS A REPUBLICAN HOUSE FOR THE FIRST TIME IN 40 YEARS THAT FORCED THE PRESIDENT TO SPEND LESS
November 11th, 2009 at 12:24 pm
You’re making a big error in judgement. Budget surplus/deficit aren’t the same as total debt. Clinton had a budget surplus for a few years. But total debt (due to interest) was still increasing. Debt != budget.
All the debt numbers above show that the budget surplus wasn’t greater than the rate at which the US owed money.
You’re comparing apples to oranges. It’s not good that debt increased, but a surplus budget was a step in the right direction.
November 11th, 2009 at 1:13 pm
You are certainly entitled to your opinion, but sorry to say I completely DISAGREE Matt. Clinton only had a surplus on the “public debt” side, but this was more than offset by an increase in the “intragovernmental debt”. The total is much more important and relevant than the parts because they BOTH MUST BE RECORDED AND PAID BACK.
Eventually (probably much sooner than we imagined), the intragovernmental debt will STOP GROWING ENTIRELY. This is because there will no longer be any money to borrow/steal from social security (the main source of intragovernmental debt). The whole reason a surplus exists in social security is because of the current age demographics of the United States. The right thing to do would be to save and invest those surpluses for what they are intended – the future retirees.
Perhaps it will be a good day when social security runs a deficit. At least then there will be no misleading statements by the treasury, and all the idiotic main stream news organizations who like to conceal the truth by advertising only the “public debt” figures.
My analogy still holds true. I’m not going to congratulate my friends and family members for paying down their $5,000 VISA bill if they did so by running up $6,000 on their Master Card.
November 12th, 2009 at 11:22 am
As somebody facing retirement age in the next decade, and having paid SSI all my life (mostly at the increased 15.3% rate – which becomes more obvious if you are self-employed) – I am concerned about the massive “borrowing” that the US government has done against those surpluses in order to finance the general fund deficits. Who’s going to repay that? Future taxpayers and workers.
The surplus was largely due to an increase in SSI rates beyond what was needed to pay current retirees, with the idea being that it would help to finance the eventual retirement of current contributors. But there’s a problem with how to sock away that many trillion dollars – where do you put it? They could have invested the surplus in stocks, but that would have over the decades have made the US government the world’s largest stockholder, effectively in control of many corporations. The US has problems with that (which is one reason the bank bailout had to go through such gyrations – injecting the amount of money needed in return for stock at then market prices would have wound up with the government owning all the bank’s stock and accidentally “nationalizing” the bank). And it’s susceptible to a stock crash. And there would be some huge effects on the economy when the boomers retires and this massive investment is sold off (including the likelyhood of dropping prices). It could have been deposited in banks, but again it’s too big – the banks would have needed to invest it in turn. Instead, in essense they put it into something like government securities, in the largest and supposedly most stable economy in the world. IE: US government issued securities.
This also provided the US government with funding that it would have otherwise needed to borrow from others (like China) – and raising the interest it needed to pay for same. Imagine if the US govt had needed to borrow twice as much from China as it has (or whatever) – perhaps at twice the interest rate. So it seemed like a good match.
This would have been fairly sensible if the SSI surplusses were for some much smaller country, eg: Peru investing their surpluses in US government securities. The amount they would put in, and later withdraw, would not greatly distort the system; and the profits needed to pay it back with interest would be a small fraction of future US government revenues. The problem with a surplus as large as SSI (anticipating a huge deficit as boomers retire) is that it’s too big to put anywhere without radically changing the recipient, not always in good ways.
Maybe the SSI rates should have been reduced decades ago to just cover real expenses – avoid a surplus that’s too hard to invest collectively and let people invest it separately. But that probably would not have worked either. Maybe the surplus should have been invested in a mixture of US Gov’t securities, other government securities, and both US and foreign stocks – diversified.
I do agree that providing a windfall of cheap loans to finance general fund deficits was and is a bad option, as it encouraged overspending. The Iraq was has been funded pretty much entirely out of SSI borrowings, for example.
In a sense, the surplus was invested in the US economy, with the philosophy that a healthy economy is required to pay back the money someday. A huge balance on the books at banks, or in the stock market, is meaningless unless there is an economy from which those trillions can be extracted (whether via taxes or bank withdrawals or corporate dividends or stock sales the money has to come out of the then current economy). But there might have been better ways to so invest.
December 24th, 2009 at 7:23 am
Pointing fingers at who’s at fault doesn’t solve the problem even when we’re right. Let’s forget about who’s at fault…it doesn’t matter. What is important is fixing the problem…nothing else! The problem is worsening all the time while we take no action. The problem:
The publicized federal deficit is now $12.4 trillion dollars as of 12-24-09. If there are any mortgage people out there, consider putting this into a 30 year mortgage scenario to repay the debt within 30 years (including compound interest). Now consider the total number of people actually paying taxes of the (approx) 350 million US population. Do the math…if this doesn’t scare the hell out of you…you’re already dead!
What’s important is to solve the problem that got us here. I have some ideas but they will require getting “out of the box”. Our nation in sinking just as sure as the mighty Titanic. We need ACTION, not blame, and we need it now.
December 24th, 2009 at 10:46 am
Actually, it’s the published “debt” that is over $12 trillion. The published deficit (yearly imbalance) is about $1.4 trillion. The ACTUAL deficit (increase in debt year over year) is well over $2 trillion.
December 24th, 2009 at 8:33 pm
There’s a good reason that we seldom hear much about fixing the problem – there are currently no politically feasible “fixes”.
Basically, either our economy needs to expand at rates that would amaze the Chinese for the next few decades (such that a demographically declining workforce can be hyperproductive) and extract their surpluses (via direct taxes or via changing the ratio of costs and wages) to satisfy the debt, OR we need to write down the debts to a payable level.
How would it be reduced? Well, the people “owed” the intragovernmental debt are future SSI and Medicare recipients, who have been paying extra their entire lives and are now aging and about to need it back. So we could default on them – slash social social security and medicare and let the chips fall where they may. With those folks comprising a huge part of the voters in coming decades, cheating out of what they’ve been promised (and what they’ve paid for through withholding) is going to be politically difficult until there is no other choice.
Or there’s the other traditional option – inflation. Suppose we had approximate 10 fold inflation in a decade (which doesn’t hold candle to the real hyperinflation that other countries have experienced). That means that goods and services now cost about 10 times as much, so you are paying your maid $200/hr and your lawyer $2000/hr and cars cost hundreds of thousands of dollars – but wages have gone up too, and the poverty level is $200,000/yr. Your legacy long term debts – measured in numeric dollars not in buying power – can now be paid off 10 times more easily.
Besides the major problems that that causes to an economy, in this case it’s also difficult because so much of the money is owed to retirees, who will rightfully and appropriately press for cost of living raises to keep up. So this approach really comes down to the same thing – default on the obligation to the elderly. They can’t repossess the nation which betrays them in such a way; all they can do really is vote.
We can blame this on our leaders, but it’s not quite that simple. We refuse to elect leaders who would face up to this dillema. That doesn’t let the ones who pandered to this off the hook for oversimplifying and selling popular but untrue fictions – but we can’t claim full innocence.
The more recent politicians are the less culpable overall; they inherited an untenable situation. Often by then the only apparent way out of the immediate crisis was a Faustian bargain that made the long term problem worse. For example, many economists believed that we were on the verge of a long term depression recently; if that had happened, the economy would have been far from able to afford the debt. (The only thing worse than an exploding debt, is an exploding debt with an imploding ability to pay it!). So the gov’t borrowed like crazy, as the lesser evil. Whether it was the lesser evil will be debated for decades (and popular but untrue fictions will abound in the political marketplace), but nobody dispute that it was evil. That is, the massive borrowing will make things worse that they were previously projected (altho possibly better than if a depression – also outside the projection – had taken hold.
If anybody has a real way out of this mess, I’m listening. It’s clear that we’re going to have to consume less overall; the nation has been living beyond it’s means. Stiffing the retirees alone won’t be enough. I think the big question is going to be how the pain gets distributed. If we have tens of millions of homeless elders literally starving (say, trying to live on SSI which in todays dollars comes out to the purchasing power of $300 a month), while the top 1% continues to get wealthier, there could be social disorder as well.
December 25th, 2009 at 11:53 am
Just one point on Private Worker’s idea of inflation making the debt burden insignificant. That can be true of household debt if that household is spending within their means and not running up more debt in parallel with inflation. With government, unfortunately, since they are incapable of a real balanced budget, inflation will only exacerbate the problem.
I think the solution is to work towards a long term sustainable, and REAL balanced budget. And by REAL I mean a budget where the total government debt does not increase one single penny from year to year. Painful? Absolutely! Necessary? I used to think that we either need to face a little pain now as a country, or a severe pain in decades to come. That time is over. We need some serious pain now, rather than face an inevitable collapse sooner than people can fathom.
December 25th, 2009 at 1:44 pm
@ Geldpress – I don’t disagree with you about that. I regret if it sounds like I was advocating inflation as a real solution! To the contrary; in fact I was pointing out that even at best (in terms of budget balancing), it’s really the same as defaulting on retirement benefits indirectly.
However, inflation is a traditional response which may indeed happen.
The problem is that no politician will be elected or stay in office on a platform of serious pain now to avoid collapse later. Jimmy Carter tried to get the country to take conservation seriously, and many people resoundingly turned to Ronald Reagan who promised that the magic of the market would painlessly solve our problems. Obama proposes to finance health care through efficiency savings (which may be hard to push through the political process and/or may not save as much as hoped) combined with letting the Bush tax cuts for the upper percentiles expire – ie: promising the majority very little pain. And so on.
I do get that your intent is to awaken enough people to the need to take difficult measures now, rather than buy yet another promise that there’s a magical way out which won’t be very painful. What else can one do?
Have you posted a proposal about how to spread around that serious pain you advocate? What would it really look like on the ground? It’s clearly more than just postponing the carribean cruise and buying a cheaper car this year. Does it mean dramatically raising taxes until the debt can be paid down? Slashing social security? Reducing the military budget? Or what?
December 28th, 2009 at 9:58 pm
I don’t claim to have the answers with exactly how to fix the fiscal mess we are in. But at a minimum, we need to be honest about the way we report it, and the main stream media has to do a better job with calling foul on the government under reporting of the debt and deficits. The whole intent of the original post was to show just how wrong the main stream media gets it – over and over again. In fact, I have never once seen any main stream media source report accurate deficit or national debt numbers.
As for the long term solution for fixing the fiscal disaster, there are others way more qualified than me. In fact, the United States government has commissioned dozens of consultancy organizations over the years to propose real solutions. Our tax dollars have shelled out billions in national debt studies and solutions. And then every time the summary reports are issued, they are promptly ignored.
December 31st, 2009 at 1:32 pm
Herein lies the problem doesn’t it. The experts are not in charge. Politicians are in charge…and the people have no conduit to change this. The system is flawed.
The train has crested the apex of the hill and is picking up momentum. It’s on the downside to oblivion, but there are no brakes to stop it, or even slow it.
I’m not trying to be prophetic…I just see it as fact. Unaddressed, I see failure of our country’s monetary system as inevitable (if left up to politicians).
January 3rd, 2010 at 7:19 pm
Geld, we agree about the need to honest reporting. You lose me when you say the US Govt has shelled out “billions” for studies and solutions. What evidence do you have for that? What are the best few resulting reports to read?
January 4th, 2010 at 10:09 am
Glad you asked. For starters, check out the 1981 study by the national commission on social security reform.
http://www.socialsecurity.gov/history/reports/gspan.html
There have been many similar reports since then, and as I said, they all cost a lot of money, and they are all ignored.
Also, take a look at the history of the debt ceiling:
http://www.geldpress.com/2008/07/united-states-debt-limit-joke/
We put so much emphasis on making laws that put an absolute high on the national debt. In theory, it is like a credit limit on your own personal credit cards. With the United States, however, every time we get within half a trillion or so of that ceiling, congress swiftly acts to vote on a few trillion dollar increase of that ceiling. The last increase was just about a week ago.
http://www.marketwatch.com/story/senate-approves-short-term-debt-ceiling-increase-2009-12-24
For other costly studies on runaway debt, just google for “social security studies” and grab yourself some strong coffee for a days worth of reading (and perhaps laughing and crying).
March 2nd, 2010 at 11:39 am
Interesting how these comments began in 2008 when it was very fashionable to indict Bush and the GOP for the growth of the deficit during his term. Now 20 months later, the Democrat brought in to “fix” Bushes mess has quadrupled that deficit and will have tripled the debt by the end of his term.
I continually stand amazed that the two latest tax reductions by Reagan and GW Bush directly and almost immediately resulted in economic recovery and increased tax revenue but the current custodians of the Presidency decide the best way to tackle the problem is to do exactly the opposite. To disastrous results.
March 2nd, 2010 at 4:46 pm
Actually, M Colins, this post is not intended to favor or blame any one party. I blame the republicans and democrats equally and find them both equally irresponsible. Look at the title of hte post again. Not since 1957 has the United States had a real balanced budget. There have been plenty of republican and democrat presidents and congress majorities since that time.
March 2nd, 2010 at 6:49 pm
I’m with you on that, both parties have used the same dodgy accounting trick of using the IOU in the empty Social Security Trust fund to help obscure the actual deficit. I was trying to point out that in context of when this article appeared, the natural inclination for some of the commenters was to go after Bush. Well its 20 months later and Bush doesnt come of too badly by comparison.
March 3rd, 2010 at 5:35 am
Colins statement was on the money…as was yours, that this site is not about blame (that’s good). You also stated there have been many alternating party doninations since “57″. True. We keep ousting one party for the other to rebuke them for their failures (it’s cyclical). WE need to fix the problem, and it’s not the politicians…it’s the democratic method that we’ve installed 200+ years ago that hasn’t evolved. Wipe the slate clean and think about how YOU would correct the problem of administering fair demacracy from scratch…and you will find the answers are evident!
April 13th, 2010 at 6:55 am
Your actually incorrect in the whole assertion and post.
a balanced budget is one in which you take in what you spend in one year. It has NOTHING to do with the debt. and we have had several budget surpluses over recent and not so recent history.
See the budget is a yearly figure — it does not take the debt into account… so Yes Clinton did have a budget surplus, see what you did, (btw so did Nixon) you changed it from a yearly fiscal statement (the one CNN made) to a overall debt discussion – and that is like comparing apples to oranges…
You can have a budget surplus and a deficit debt all in the same time… or vica versa a surplus debt and deficit budget.
It’s like this, if you make 50K a year and spend under 50K a year then your budget for the year is positive, but you may have 100K in debt for let’s say your home mortgage — that does not mean economically you are in bad shape, it means economically you spend less than you made and your debt may or may not increase depending on interest rates, payments toward the debt etc… see the difference?
So while Clinton had a debt, he also had a balanced or surplus yearly budget which would allow for the payment of debt… hmmm kinda changes the view doesn’t it…
April 15th, 2010 at 10:14 pm
Sorry George you are wrong about this one. But we can agree to disagree.
BTW, if you ever find yourself out of work, Im sure CNN is hiring.
April 16th, 2010 at 2:41 am
Whether George is “technically” correct or not is unimportant to me. A balanced budget to an accountant may be interpreted exactly as George states, however, all that the rest of us (non-accountants)laymen care about is that the income is far surpassed by the debt, meaning (glub, glub) we’re going down! That does matter to me! It also matter to me that there’s no life preservers on deck. In any language that spells disaster doesn’t it George?
April 16th, 2010 at 9:49 am
George you are asserting others don’t know theres a difference between the debt and deficit but it appears you dont understand that if the national debt rises from one year to the next it means that previous year we operated at a deficit. Note that at no time during Clintons term (or previous Presidents) does the debt reduce it always goes up. It should be enough to admire the deficit got quite low during that time but youre simply one species of liberal (the other includes Lefties who insist the surplus was $100s of billions of dollars) who undermines their own credibility with provably false propaganda. Further, if you check back to periodicals of the time, it was a “projected” surplus over the next 2 years which never materialized as the economy began to falter soon after. No matter, as the Democrats claimed economic victory and the myth became the gospel narrative.
The next part of the Lefty Bush meme is that he squandered this mythical surplus and increased spending and the deficit. Apparently Bush was supposed to take an economy which was already contracting at the end of the Clinton years, get hit with 9-11 which plunged the entire world into recession for two years and somehow run surpluses which Clinton himself didnt even achieve until after 6-7 years of growth. Meanwhile the non fiscally conservative Bush was aided and abetted in massive spending increases by Democrats whose only complaint with Bush was that he wasnt making these programs big enough. And to further add to the irony those same Liberals castigating Bush for his increase in the deficit are silent when their own guy triples it in his first year and is scheduled to quadruple the national debt by the time he is out of office!
I hope this clarifies things for you.
July 5th, 2010 at 4:19 pm
[...] to know. Depending on whose voodoo economics you believe, the books were balanced 10 years ago. The United States has not had a balanced budget since 1957! | Geldpress In September 27, 2000, CNN wrote that that:the federal budget surplus for fiscal year 2000 amounted [...]
July 6th, 2010 at 10:54 pm
The premise of the statement is “balanced budget” not level of debt. Market man is twisting the facts to discredit Clinton for acheiving a balanced budget or he doesn’t understand finance 101. Obviously politically motivated or maybe Marketman needs to go back to business finance school. A budget is a plan for a specific time period showing revenue and expenses. If your revenues match or exceed your expenses for the time period you have “balanced” the budget or exceeded it on the revenue side putting you in the black (which is better than balanceing it). The fact that you have loans out and they’re not all paid off yet does not matter as long as your required payments on that debt fit within the budget.
July 9th, 2010 at 7:00 pm
I see Clinton getting at least some credit for reducing the deficit, but wasn’t there a Republican congress at the time who resisted efforts by Clinton to increase spending?
July 15th, 2010 at 1:48 pm
“WE need to fix the problem, and it’s not the politicians…it’s the democratic method that we’ve installed 200+ years ago that hasn’t evolved. Wipe the slate clean and think about how YOU would correct the problem of administering fair demacracy from scratch…and you will find the answers are evident!” – Mark
My comment may be a bit off subject, but I felt I needed to respond to Mark’s comment above.
First the “problem” is that America was never intended to be a democracy, it was to be a Republic system government and enterprise. Unfortunately, at the turn of the 20th century, around 1900 and the formation of the IIS progressive movement, our educational system, banking system, and political system was attacked. With the passage of giving banks the right to print money, then the 16th amendment to allow the federal government to tax income,, and probably the most damaging one the 17th amendment that moved all elected power to Washington and removed all balance of power from the congress… this allowed what was an ideal governmental setup by our founders to move to the bastardation of what we call America now… for anyone that thinks for one moment that we live under the constitution as it was written and respected for over a hundred years is sorely mistaken… As for the national debt and / or deficit…. Until we straighten out our constitution “we the people” simply do not have the power to do anything at all…. sorry to say… I would say Support your local governments are best you can and stock up on sustainable goods….
July 16th, 2010 at 1:21 pm
Sorry Ken, but you are wrong, despite issuing one correct statement in your comments – “If your revenues match or exceed your expenses for the time period, you have “balanced” the budget…”
Yes, during the Clinton era, he did have “revenue” that exceeded expenses. However, this is only because the government definition of “revenue” includes social security surplus’s. Remember, those surplus’s were only there due to a temporary condition in the nation’s demographics. Every corporation in America by law must maintain separate books for pension programs and for general operations. The US government will count the surplus (TEMPORARY!) in social security as if it were the same as general tax revenue.
Also, I will remind you that even during Clinton’s era, the national debt did INCREASE every year. Look at the links I have provided and it will become clear to you. We separate our national debt into 2 components – debt held by the public and intragovernmental debt (theft from social security “trust” fund). It’s simply laughable that the debt held by the public goes down, and the intra-governmental debt goes up by a more than larger amount, and yet the media calls this a “surplus”.