The Clinton Surplus

So we've all heard about Bush coming into office with a surplus. Then one day, I heard Ann Coulter say that the surplus was "only on paper". Ooh, how interesting. I must look into that. This is what I found.

For the whole explanation, please read Craig Steiner's article here.

If you are lazy and want to get to the meat quickly, just like I do, here's the quick version.

National debt = Public debt + Intergovernmental holdings.

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.

Intergovernmental holdings is when the government borrows money from itself--mostly borrowing money from social security.

The following table shows national debt and the claimed surpluses for the last 4 Clinton fiscal years:



"While public debt went down, intergovernmental holdings went up each year by a far greater amount and, in turn, the total national debt (public debt + intergovernmental holdings) went up. So there lies the misconception and false claim. Clinton paid 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 intergovernmental holdings. How nice! Politicians stealing from social security.

To quote Rose, it's like taking money from your kid's piggybank to put in his college fund and calling it "savings".