I would like to compliment Bobert on finding some data to support his statements about the Clinton Surplus. He evidently believes he is right but the data he found does not explain why the federal deficit grew every year of the Clinton presidency.

A increased Deficit >< A Surplus.


Clinton clearly did not achieve a surplus and he didn't leave President Bush with a surplus.

So why do they say he had a surplus?

As is usually the case in claims such as this, it has to do with Washington doublespeak and political smoke and mirrors.

Understanding what happened requires understanding two concepts of what makes up the national debt. The national debt is made up of public debt and intragovernmental holdings. The public debt is debt held by the public, normally including things such as treasury bills, savings bonds, and other instruments the public can purchase from the government. Intragovernmental holdings, on the other hand, is when the government borrows money from itself--mostly borrowing money from social security.

When it is claimed that Clinton paid down the national debt, that is patently false--as can be seen, the national debt went up every single year. What Clinton did do was pay down the public debt--notice that the claimed surplus is relatively close to the decrease in the public debt for those years. But he paid down the public debt by borrowing far more money in the form of intragovernmental holdings (mostly Social Security).

Update 3/31/2009: The following quote from an article at CBS confirms my explanation of the Myth of the Clinton Surplus, and the entire article essentially substantiates what I wrote.

"Over the past 25 years, the government has gotten used to the fact that Social Security is providing free money to make the rest of the deficit look smaller," said Andrew Biggs, a resident scholar at the American Enterprise Institute.

every year the "official" claimed deficit is smaller than the amount by which the national debt went up. This is true under both Republican and Democrat presidents. Sometimes the differences between the two are smaller and sometimes they are larger, but the real deficit (calculated by the amount the national debt increased) is always larger than the deficit the government claimed.

Consider the following:

    * The sum of all Carter's claimed deficits was $252.709 billion but the national debt went up by $299.015 billion.
    * The sum of all Reagan's claimed deficits was $1.412228 trillion but the national debt went up by $1.859576 trillion.
    * The sum of Bush Sr.'s claimed deficits was $1.035646 trillion but the national debt went up by $1.554057 trillion.
    * The sum of Clinton's claimed deficits and surpluses actually resulted in a net surplus of $62.904 billion but the national debt went up by $1.395974 trillion--only 30% less than the increase during the Reagan administration.
    * The sum of George W. Bush's claimed deficits (through fiscal year 2008) was $2.131405 trillion but the national debt went up $4.217262 trillion
    * The sum of all the reported deficits of these five presidents is $4.769084 trillion but the national debt has gone up $9.325885 trillion!

Clinton and George W. Bush's figures warrant special attention.

To those who cling to the belief that Clinton had a surplus, please review the official surpluses for the Clinton years (FY1994-FY2001). The sum of the claimed surpluses in the last four years actually exceeds the sum of the claimed deficits in the first four years. The result is that if we believe the official CBO deficit/surplus reports, the overall balance of Clinton's presidency was a net surplus of $62.904 billion. Yet during Clinton's presidency the national debt actually increased by 1 trillion 395 billion 974 million dollars. Those that defend the validity of the government surplus/deficit figures need to explain how an alleged 8-year net surplus of $62.904 billion during the Clinton administration caused the government to increase its debt by $1.395974 trillion. If Clinton's administration took in $62.904 billion more than it spent (the definition of a surplus), then why did it have to borrow another $1.39574 trillion?

George W. Bush's presidency also highlights the same problem. If we add up the official deficits of Bush's seven fiscal years so far, the total is $2.131405 trillion. But detractors correctly point out that Bush has increased the national debt by $4.217262 trillion--almost twice the stated deficits.

It's Time To Stop Blindly Believing The Government

Clearly the U.S. Government is using a very "interesting" (to put it politely) form of accounting. But the huge deficits under President George W. Bush have amplified the disparity between the two numbers so extremely that it seems amazing that anyone still clings to the belief that the government's stated deficits and surpluses reflect reality. If Clinton supposedly had a net surplus of $62.904 billion, why did the government borrow $1.395 trillion during that time? If Bush's deficits have "only" been $2.13 trillion, why then has the government found it necessary to borrow $4.22 trillion?

In the face of such amazing discrepancies I find it incredible that people still cling to the CBO/government numbers. These people are basically saying, "I believe Clinton had a surplus because the government told me so and because I don't hear Bush disputing the Clinton surplus claims." Sure, but do you think Bush is eager to alert the nation to FY2008's $1 trillion deficit when he can use the CBO accounting approach and claim a $454 billion deficit? The government approach to accounting makes all politicians look less bad. Carter, Reagan, Clinton, Bush, Obama... these are politicians, folks. Politicians are not known for their truthfulness. So why are so many people so willing to blindly accept the numbers they give us?

I think it's time that We The People stop tolerating smoke and mirrors in Washington. If the national debt increases in a given year, that's a deficit. If the national debt decreases in a given year, that's a surplus. It's really pretty simple and the beauty is that any citizen can check to see how the government is doing every day by looking at the current national debt. The U.S. Treasury Department updates the number every day. To the penny. Don't trust politicians to tell you how fiscally irresponsible they have been with your money. Check the U.S. Treasury that tells you exactly what we owe. Politicians can say anything they want but, in the end, all that matters is our current debt. That's their real legacy and the only number that will make any difference years later.

With the U.S. Government authorizing a $700 billion blank-check bailout with no transparency and no oversight and President-Elect Obama telling us that "we shouldn't worry about the deficit next year or even the year after" , the truth is we better worry about it. They're spending our money faster than we can pay taxes and, apparently, We The People are the only oversight there is.