Wednesday, September 08, 2004
The Alleged Budget Surplus During the Clinton Administration
It shows more debt every year. Yes, there is a slowing of the increase from 1999 to 2000, but we still owed more money each year. The debt doubled from $3.665 Trillion in 1991 to $7.366 Trillion in 2004; 13 years! Using the rule of 72, that means that debt has been compounding at a rate of at least 5.5% per year.
In order to show a surplus our government borrows from Social Security to make up the difference. Suppose you have a child of 16. The grandparents gave her $50,000 for college, which she keeps in the bank. In addition she/he gets a job at Nordstroms selling shoes and manages to save $500 a month while going to school. Now you as a parent make $4,000 per month and spend $5,000. You can go into debt by a $1,000 per month or you can borrow from your childs bank. If you take out $1,500 per month, you could say you are running a surplus of $500 per month. But in the bank account are your IOU's mounting at $1,500 a month. Now, it goes without saying, the average family would not run their finances this way. Not only would it piss off the grandparents, but I can see a lot of sleepless nights for the parents.
We are being lied to about the deficits and the amount of debt by both sides and we should demand openness.
For a look at the amount we owe go to: http://www.brillig.com/debt_clock/.
Hit the refresh button as often and as fast as you like and watch it grow!!