Did the national debt go down under Clinton?

[Dardedar]

Still trying to get to the bottom of this question regarding the "surpluses" under Clinton. From the: "U.S. National Debt Clock FAQ."

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The following graph shows how the National Debt has grown year by year since 1940 in actual dollar amounts, uncorrected for inflation:



This data was gathered from the U.S. Treasury department's web site. More specifically HERE.

I took the Debt numbers from the above graph and converted them all to 2000 dollars. Picking a different year would not have changed the shape of the graph below, just its height:



As you can see, except for a rise at the end of World War II, the Debt remained remarkably constant for nearly forty years when inflationary forces are taken into account. After 1983 however, with the notable exception of the Fiscal Years ending in September of 2000 and 2001, the trend has been upward even when inflation is taken into account.

Link

DAR
A fellow named Steiner has a page often cited by conservatives which purports to debunk the myth of a Clinton surplus. Here is a response:

"You and Craig Steiner need a refresher course in government accounting. Receipts into any federal trust fund INCREASE the public debt, they do not reduce it. This is because the funds are immediately invested in Treasury securities so as to earn interest until obligated and expended, and any issuance of Treasury securities increases the public debt. When expended, Treasury securities are redeemed by the trust funds and the cash is used to fund the outlays authorized. This causes public debt to go down. Thus, an increase in debt associated with these trust funds is evidence of a SURPLUS of taxes and other receipts over expenditures made. You are trying to use one surplus to argue that another one didn't exist.

You and Steiner are hardly the only ones who are "confused" as to the actual relationship between debt and deficit. Many bogus right-wing articles try to pull the very same hoax. Just because the numbers they use are taken from valid sources does not mean that the numbers are being used correctly, and in these cases, they most definitely are not.

Bottom line is that the Clinton surpluses were quite real and there is nothing that can magically go back and erase them."

LINK

What does Larry W. think?

[Doug]

DOUG
My understanding is that Clinton created a surplus in the budget. He did not eliminate the debt. That would be a different claim.

It's as if you still have household payments of a credit card, a car payment, a mortgage payment, utility payments, etc., but you curb spending enough so that, after all your regular payments during the month, you have money left over. You still have debt, but you've managed it with regard to your budget spending on the payments.

[Dardedar]

Of course the debt wasn't eliminated, but did it go down? It seems, in raw dollars, it did not, but if you adjust for inflation, it did.

[Doug]

Of course the debt wasn't eliminated, but did it go down? It seems, in raw dollars, it did not, but if you adjust for inflation, it did.

DOUG
OK, but that is a different issue from whether Clinton created a surplus.

[L.Wood]

Under current accounting, even with a budget surplus as Doug pointed out, there will still be increases in public debt.

Social Security is one example. Current contributions (intakes) are used to fund current distributions (payments). The balance
is then put into the general treasury (spent) and debt is issued for that amount. With "baby boomer" generation retiring there will eventually
be a drawn down in debt as as special treasury bonds held by Social Security Administration are redeemed to pay for increasing
distributions to retirees. Btw, this is something that neither Demos or Repubs are willing to publicly discuss, the day when Social Security
intakes (taxes) are not sufficient to pay current, required distributions. Then all the excess the government has been taking and spending and issuing bonds for
all these past 30 years will need to be paid. Rwingers like to call Social Security as being "insolvent." But it isn't. It just means that government will need to
cut spending in other areas or raise taxes (perhaps both) to pay back the Social Security fund for what has been borrowed from it.

Also, as more currency is placed into circulation debt increases. U.S. Treasury sells bonds (debt) to Federal Reserve System which then issues
currency (or its equivalent). Treasury bonds sold to FRS are interest bearing. That interest due is also added to the debt. Bush II and Obama have both made
extensive use of this debt technique.

Each time government spending exceeds government revenues debt is created. Thus Reagan and Bush II, by sharply cutting taxes, reduced government revenues
and the balance had to be made up by borrowing (debt).

.

[princess76]

I don't know yet about that issue so I did my own research if Clinton bring national debt down to zero. But the answer is no. He just balanced the budget for that single year but he did not reduce the debt to zero.

[tmiller51]

Yes, I don't think anyone who knows what they are talking about has claimed that Clinton brought the debt to zero. He did bring the budget deficit to less than zero for at least a year. The debt has taken decades to accumulate but most of it grew during the Reagan and Bush administrations.

Tim

[Dardedar]

Notice last year of Clinton, in current dollars:

US National Debt by Presidential Term:

Per Capita and as Percentage of Gross Domestic Product

[jon]

this is why national debt is calculated by gdp.. not dollars