can someone with an economics background help me?

[silverchair]

i showed this chart to a friend of mine:



and he replied with this statement:

"That's kind of hard to believe that all under all of the presidents we were in the red, and then Clinton comes along and we were at +523. I've heard that Clinton had some shady reporting of figures to the congressional committee and misappropriated funds... Something is fishy here... especially since the economy is finally back on track. ((also it looks like that chart is two years old since it says projected 2003, 2004)). Only time will tell... :) We are in for one exciting race..."

is there anyone who can explain the figures to me? thanks.

[JNelson6563]

1. What's to explain?

Other than your friend would rather believe what the media whores tell him instead of his lyin' eyes?

Happens all the time with reich-wingers. Hardly a phenomenon.

Julie

[papau]

2. no such claims of Clinton fake econ numbers have ever been made

Clinton shady reporting of figures to the congressional committee

and misappropriated funds?

no such claims have ever been made by anyone - other than your friend. Your friend is a liar.

Now if he wants to discuss the changes to seasonal adjustments, and to pretend new at home job creation that we just can not find any data on - Bush value added - we can discuss lies told with government reports!

:toast:

:-)

[TreasonousBastard]

3. It is phony, but not entirely Clinton's doing.

They just love to blame everything on Clinton, and give him none of the credit. Pretty much like what we're doing with Shrub, except that Shrub has done nothing to credit him with.

I'd have to dig out all the details, but Government accounting is so screwed up that the details almost don't make any difference.

First problem is figuring out just what is actually in the "budget." There are so many things tossed "off-budget," like Social Security, that the the budget doesn't make much sense any more.

There was also the elimination of short-term treasuries, letting Congress play around with just where to put the interest charges. And at least one year Congress simply decided to reallocate expenses into the next fiscal year.

All of this, of course, is highly illegal in the private sector, and beyond even what Enron cooked up.

Be that as it may, what Clinton did try to do was slow down the growth of debt paying the bills, and to some extent it worked. The operating principle seems to be that if you can at least pretend the budget is balanced, it gives you some breathing room to work harder to actually balance the budget.

Personally, I think there's enough blame to go around and hit every politician and citizen. Every single one of us will happily take a gummint bennie and fight paying taxes. And the politicians of all parties are perfectly happy to buy our votes with programs or checks.

As Pogo said, "We have met the enemy, and it is us."


Now, what everyone should do once in a while, to bring us back to reality, is simply add up...

Total Federal receipts

Less: Total Federal money spent

Equals: One big-assed red number.


Then, to make it worse,

Total money we made from selling stuff outside the country

Less: Total money we owe by buying stuff outside the country

Equals: Another big-assed red number that we cover by borrowing from people outside the country.


The official numbers never look this bad because they keep coming up with new definitions of "Budget" "Deficit" "Current Account Balance" and other things that essentially cook the books and hide as much bad news as they can. The truth is that we are borrowing ourselves into a hole and have a net outflow of capital thanks to our trade deficit. The only thing keeping us afloat is that we are so damn big everyone is working overtime to make sure we don't go belly up and take the rest of the world with us.

We're really in as bad shape as Argentina.

[spooky3]

4. It's largely for real.

Of course there are always differences of opinion about the "correct" ways of accounting for certain things, but that is a relatively small factor that should not obscure the much larger reality.

Ask your friend for evidence (a link to a credible source) to support his charges of "misappropriation" etc. Bet he doesn't have one. It's his burden if he's going to charge that the CBO numbers are wrong. Ask your friend which party controls Congress at this time. Why would they fudge the numbers--to make Clinton look good?

The Democrats passed a tax increase in Clinton's first term, partly in response to the irresponsible deficit spending of the Reagan and Bush I administrations. This helped increase net revenues.

Another factor that increased revenues was that the economy was improving, so employed people were paying taxes, and the stock market gains were also taxed.

It is true that Social Security is not properly funded, but this has always been the case. The system is designed to be underfunded. Social Security should be funded as private defined benefit pensions are required to be--that the money you and your employer put in should be set aside, to earn interest/gains for you, and your coworkers, not used to pay current retirees' and beneficiaries' benefits.

It should be borne in mind that this chart refers to the annual surplus (deficit) of revenue over expenses. A different chart could show the accumulated debt, over many years. While Clinton's admin. was able to chip away at that accumulated debt, it was reduced and not eliminated. That's a significant accomplishment though; Bush II is greatly increasing it, obviously, as did his Repug. predecessors.

As for your friend's concern about the use of projected 2003 and 2004 figures, that's easily dismissed:

(1) does your friend have more current figures? If so, they probably make Clinton look even better relative to Bush II than the estimates.

(2) these may be the most current numbers that are available. Sometimes it takes months for all the final, audited macroeconomic data to come in and be put into usable form.