I’m here to blow a hole in the myth that Clinton created an amazing budget surplus that Bush squandered and turned into a huge deficit. The above chart shows the deficit/surplus since 1980, pay no attention to Obama’s first year. I’ve talked enough about his budget deficit recently.
The following is a chart of the Nasdaq from 1990 until now:
At the end of Clinton’s term ONE THIRD of ALL revenue came from capital gains taxes. This is pretty astounding. I’m certainly not giving Bush a pass, he raised spending a huge amount and that is the biggest thing that annoyed me about his Presidency. That being said he was not blessed with the same environment Clinton had to work with. There were no capital gains tax revenues, only losses. The tech bubble and subsequent bust was the cause of Clinton’s surplus and Bush’s initial deficit.
Clinton gets far too much credit for something he had no control over, and in the long run was very bad for our economy. Let me know what you think in the comments below.
Sometimes, it’s better to be lucky than good.
Did you even graduate from _hight school?! Surely not.
Mittens #2
So, who are you calling short? Oh,. . . you meant “high school” as in the author was obviously not indoctrinated adequately by the teachers’ union to honor the mythology of the left. Now I get it.
@Mittens:
Such a clever non sequitur. Nice lead-in to what you plan to say next, I’m sure, and how you will demolish his arguments with your superior reason and wit.
Wait, don’t start until I can make some popcorn. I don’t want to miss a single delicious moment.
OK, go ahead…
The whole Clinton term was characterized by corporate malfeasance. Some say that the lying that was so acceptable in the White House and cabinet that the effect merely “trickled down.” Eight years of partying and “who gives a s***” led to not only the tech bubble, itself a product of not merely unrealistic optimism, but that same culture of deceit and fudging. One might even say the ends sought by the biggest players in the tech bubble was partying, as well. Ferraris and champagne, nevermind the upcoming cliff. But the Clinton years led to the deceit and false “green” hopes that allowed Enron to pull of what was only – mistakenly – known as the worst scam of the period because the MSM would barely even TOUCH the Dem-tainted scandal that was Global Crossing, which made “green” energy insta-giant Enron look like a lemonade stand ripoff.
Sure the Clinton economy looked GREAT! And bubbles are what naturally happens when everyone is lying and money is being made by gambling on the future they’ve based on made-up numbers. Ferarris and champagne.
In GWB’s first few months, the press was, en masse, visibly depressed that the party machine in Washington had nearly ground to a halt. The adults were back in town.
Word has it the Obama White House held more big gala parties last year than there are days in the year.
Clinton’s surplus was phony since it came only from cutting the military by over 40% and we’re paying big time for that today. No one even bothered to find the billions of dollars in military equipment that vanished in thin air. Yet people believe the Arabs are giving him millions for nothing. Giving Slick a few million for billions in equipment would make sense.
What’s a “hight?”
Why do people rush to type something, and ignore the red squiggly lines beneath misspelled words? What do you think they are there for? To highlight brilliance? Is the anger so intense that you won’t take a second to look up a word? Or at least keep throwing vowels and consonants until something right shows up? Beats me.
Meanwhile, as for Bill’s “surplus,” I do recall, loosely, that he used some budget tricks to push expenses to following years, but kept revenues in current years, so that a “surplus” magically surfaced, to help Al get the presidency under the “good management” school of government. To para-quote a president, “Bush inherited his deficit from Clinton.”
I do think, too, it is sort of silly to talk even about a “budget” of the USA when there are 13 or so budgets, or appropriation bills. There are also entitlements whose true costs can’t be known until after the fact (and often long after anyone will go and correct the record.) Also, Social Security and Medicare, and a few lesser things are both part of and separate from the budget. After all, Social Security is supposed to be a dedicated funds program, people pay in, benefits are paid out, and the “surplus” for Soc. Sec. is put in an account somewhere for future payout, but are often replaced with T-bills or some other sort of federal obligation – in effect the “surplus” is a debt, or deficit element, at one and the same time. Plus there are supplemental budgets, off budget items, recapitulations, adjustments and a melange of other devices to do what is necessary to hide the true costs of government. Plus there are accounting methods unique to the Feds that don’t pass muster under GAAP to further confuse and conflate the issue. Added to that, sometimes, taxes are accounted for as revenues, but are not collected, but are expected to be collected. Not to mention, either, the old quip that “a billion or two are mere accounting errors.” Who knows how many billions this is?
I could go on, and I suppose there are wonks with far more analysis of this funny fed math mush than I can do. But to think that Bill had a “surplus” is sort of wrong. As is perhaps Obama’s deficit. It may be higher or lower than stated, who knows? Be that as it may, no matter how you look at it, the Federal Government is spending too much, with no end in sight, nor can it ever gain the revenues needed to cover its expenses or obligations. And there in lies the problem, not if Clinton had a paper surplus.
However, if Bush had just maintained spending levels and increased them with inflation? He would not have had a deficit.
His own budget took us from 2 Trillion, to 2.77 Trillion in the 6 Years he had control of the budget process.
So, Yes, Clinton was helped by Capital Gains taxes, but Bush was hurt by his own spending increases.
It might be worth noting that our nation’s decent into the deepest pit of debt it has ever been in has coincided with the greatest and most rapid upward transfer of wealth in history.
@Romeo13:
“…Bush was hurt by his own spending increases.”
Yes, sadly Bush was no fiscal Conservative. But he was still far more Conservative than the current crop of suicidal Democrats and Obama ever could be. Though there are those who feel Bush was less Conservative, shudder, than Klintonius the Kinky.
I do hope that the next Republican president will, in fact, BE a Republican.
I’ve made this point many times to my lefty friends but it falls on deaf ears. Among many other factors during that time period:
1. Clinton got a windfall from a “bubble economy” that turned out to be built on sand and was in the process of imploding during his final year in office.
2. Clinton got the “peace dividend” paid for by past adminstrations, especially Reagan’s, and by our men and women in uniform. You can see this clearly in the budget numbers by looking at defense spending as a % of GDP.
3. Clinton got lucky to catch the previous trough in oil prices, which ended that decade at $10/bbl. Of course, the underinvestment in new finds during that time period led in the next decade to skyrocketing prices. Count that one as a squandered opportunity to wean ourselves from oil imports.
4. Everyone forgets about the Republican congress that put the kabosh on his expansive plans. I’ll give him props for figuring out which way the wind was blowing and tacking enough to stay in office, something the current adminstration seems not to be doing.
5. People forget the sheer force of demographics. Thanks to action during the Reagan adminstration, Social Security was put on temporarily better footing by extracting more tax money from boomers. As boomers now begin to retire, inevitably the math on such programs is going to work against successive adminstrations. Actually Bush was lucky to get out of Dodge when he did – this bomb is now going off on Obama, and will continue to plague his successors. What would be fair to say is that Obama hasn’t done anything to defuse the bomb, but the fact is he’d have a growing budget problem even if he wasn’t spending money on bailouts and stimulus programs.
Thanks for all the insightful comments guys, save mittens. Clinton was clearly a beneficiary of the bubble as well as clever accounting as some have pointed out. As I said in the article, Bush’s spending really made me really angry, but in his defense we did need to put our military back together after Clinton took it apart and 9/11 hit. Consider though that while Bush took spending from about 2 to 3 Trillion in 8 years. Obama has managed to take it all the way to 3.8 in 2 years. I’m scared to see what it will be in 4 and heaven forbid 8 years.
I am surprised the whole dot com bubble burst isn’t brought up more. Everything tech or internet related was why overhype and Bush had to deal with that coming in, which i think Clinton let get out hand when folks knew there wasmuch to the dot com hype, and then right into 9/11.
I agree Clinton get way too much of a pass and credit for stuff that isn’t true.
I hate graphs that are not to proper scale. It tries to hide statistical manipulation. The NASDAQ is much worse than the graph shows. That graph has almost the same measurement from 1k to 5k as it does from 0k to 1k. Spread the graph out to show equal spacing between each 1k and the graph is much more dramatic.
@Trubador:
The graph is to a proper scale, it is a logarithmic scale that many stock charts use. I am certainly not trying to hide anything, as the linear scale actually fits more to my point. I will work up another picture that will show the change. Thanks for pointing it out.
An incredibly dumb post. First, the NAS is an exceedingly narrow measure of share value. The S & P 500 is more meaningful as a measure of business activity.
Second, the stock market, even broader measure, is neither the measure of the economy nor the measure of tax revenues.
Third, there was a surplus; there is no dispute about that. There is also no dispute that the GOPer ran up trillions of dollars in debt after Clinton retired debt toward the end of his presidency. Thus, there is no”myth” that Clinton handed off a budget surplus. It is a fact that is historic, which no spinning can change.
@BRob:
Reality bytes. Again:
Yes, there is a “dispute” about it among those of us who know the truth of the matter.
Yes, the Clinton “surplus” is a well perpetuated myth.
The facts and figures of the matter do not lie.
Feel free to cross reference anything you wish to here.
why are people so thick as t believe that clinton was some economic genius and great president, when he was chasing skirts, being impeached and preparing to leave a broken IT bubble and a bin laden at large right on the new presidents desk. yeah, he was pretty great…. history will tell the story from the proper objective perspective..