Favorite

Bush blocked debt's end 

Since marking red-letter days such as anniversaries of U.S. invasions and assassinations with post-mortems is all the rage, here is another that so far has passed unnoticed: 2013 is the year that the U.S. public debt is supposed to be retired, at least if you were a disciple of Bill Clinton.

As everyone knows, the public debt has not been disappearing but climbing — to right at $12 trillion now, or $16.8 trillion if you want to add in governmental debt holdings like the Social Security Trust Fund. The larger figure is scarier so it is commonly the one used.

You probably do not remember the 2013 debt-elimination schedule because it was never implemented. It's worth remembering now because it is handy to explain the "debt explosion" that Republicans have used to frighten the wits out of most Americans and the pointless stalemate that stymies the government and frustrates the country.

In January 2000, with some fanfare, Clinton released his fiscal 2001 budget, which would be the last of his presidency. The budget anticipated (and it would actually experience) the fourth straight on-budget treasury surplus. The actual surplus would amount to $236.4 billion in the fiscal year in which he was speaking and $127.3 billion for fiscal 2001.

Surpluses were forecast far into the future, and Clinton's budget dedicated those surpluses to early payment of all the nation's debt securities, which stood at something more than $5.5 trillion. The calculation was that the public debt — that held by the public, including foreign investors like China — would be retired in fiscal 2013. Right about now, America would have found the Holy Grail.

But Republicans held Congress and they had other plans, large tax cuts to free up the investor class and stimulate growth, and greater military spending, which Clinton and his predecessor, George H.W. Bush, had more or less held in check. Clinton's plan was dead on arrival, Democrats lost the election that fall, and you know what happened then.

George W. Bush and the Republican Congress, adopting Dick Cheney's famous epigram that Ronald Reagan had proved that deficits don't matter, slashed individual and corporate taxes, especially for investors and high earners, expanded tax breaks, started two wars and hiked military spending from $385 billion to $800 billion a year, expanded Medicare without raising taxes to pay for it, and beefed up the national-security state.

Clinton's surpluses, which he expected to pay down the debt, ended instantly and massive deficits replaced them — on-budget deficits of $538 billion in 2003 and $568 billion in 2004. The Great Recession hit in December 2007, followed by the financial collapse the next fall. Bush's final budget, fiscal 2009, showed a deficit of $1.55 trillion, although the off-budget figure of $1.4 trillion is more commonly used. Bush's bailout of the financial industry and his small stimulus program swelled the deficit that year and cascaded through the next two years.

Deficits have been coming down since 2009 despite Barack Obama's stimulus program. This year, the red ink will be in the neighborhood of $850 billion, and it will fall much farther in 2014 and beyond if the deficit-lowering provisions of Obamacare are allowed to kick in and the economy continues to grow.

But the message that has taken hold is that the nation's debt is speeding the end of the world and that it is Barack Obama's fault. So effective has it been that Obama has offered to halfway adopt the Republican religion that America is going to hell for coddling the elderly and disabled — society's nonproducers. Although Social Security has not contributed a dime to the deficits, he offers to lower future pensions.

The goal of no deficit and no debt is still a worthy pursuit as long as your means do not do even more harm. In a healthy economy like that which prevailed in Clinton's presidency, the remedy would be obvious: a return to exactly the terms of 2000 — tax rates that proved not to be a burden then, the 2000 patterns of defense spending and a stern regimen for health-care spending growth.

But that is not the economy or the political circumstance.

The debt that ought to be bothering everyone is not the public debt or the somewhat larger national debt that includes government-held debt. All the dire predictions about the soaring debt have proved absurd. Nations rush to buy U.S. debt even at historically low interest rates, and the dollar has been climbing against the Euro and other currencies. More than ever, the dollar is the safe haven for global money.

The real problem is the private debt of American households, which amounts to 75 percent of family income. When banks, seeking greater and greater profits, gave up the formula that people could only afford mortgage payments of 25 percent of their income, Americans took on a massive debt overhang. That and banking craziness gave us the financial collapse and the Great Recession, and it is still a pall over the economy. For four years, the government has spurned debt relief, which would have freed people to spend more money on things that create demand and jobs.

The avowed Republican plan to force a balanced budget through massive government spending cuts, if it succeeded, would leave commercial banks responsible for financing the nation's recovery. Remember how that worked in the last decade.

Favorite

Speaking of Bill Clinton

  • The Rev. Rapert wants to rename Clinton airport

    November 29, 2016
    The Bro./Sen. Rapert has his panties in a wad over the fact that Little Rock's airport is named for Bill and Hillary Clinton, according to his morning Tweet. I guess he should head on over to the Little Rock Airport Commission and warn them the Ledge is about to take it over. /more/
  • The roots and legacy of Bill Clinton's 'abandonment' of organized labor

    November 28, 2016
    After the labor movement helped elect David Pryor, Dale Bumpers and Bill Clinton early in their careers, the three politicians took aggressive anti-union positions, Michael Pierce, an associate professor of history at the University of Arkansas, writes in a recent piece on The Labor and Working-Class History Association's Labor Online website. Pierce sees a connection between Clinton's early work against 1978's Labor Reform Bill (for the Pryor campaign), his later pro-business policies as governor and president and Hillary Clinton's struggles with working class whites. /more/
  • Bill Clinton was right

    November 17, 2016
    At the Arkansas Democratic Party's annual Jefferson-Jackson fundraiser in July, Bill Clinton gave the worst speech I've ever heard him give. /more/
  • Roosevelt Thompson memorialized at Yale

    November 15, 2016
    Yale University had its ceremony last week renaming a dining hall for the late Roosevelt Thompson, the Little Rock native and Central High graduate who died in a car wreck in 1984 shortly before leaving for a Rhodes Scholarship. /more/
  • Huckabee: 'Hillary ain't Bill'

    November 8, 2016
    Mike Huckabee closes out the presidential campaign with comments on the relative likability of Bill Clinton and Hillary Clinton and vows reprisal against Republicans who didn't back Donald Trump. /more/
  • Breitbart airs 1980 assault complaint against Bill Clinton

    October 19, 2016
    A woman identified as Leslie Milwee, a  Fort Smith TV news reporter in 1980 when Bill Clinton was governor, has given an extended interview to Breitbart, a right-wing news outlet once headed by Stephen Bannon, the leader of Donald Trump's campaign, in which she said Clinton groped her sexually. /more/
  • Take a ‘Billgrimage’ in Arkansas

    October 10, 2016
    Bill and Hillary Clinton have strong ties to Arkansas. The airport in Little Rock was even renamed in honor of the couple. Bill Clinton, the nation’s 42nd president, was born in Hope, grew up in Hot Springs, married Hillary in Fayetteville, served as governor of Arkansas in Little Rock, and made acceptance and celebration speeches in the state when he was elected and re-elected as the U.S. president. /more/
  • No, Bill Clinton did not call Obamacare 'the craziest thing in the world'

    October 4, 2016
    No, despite many reports to the contrary, Bill Clinton did not say in a speech that Obamacare is the craziest thing in the world. There are crazy problems that need fixing, but he is not calling for an end to Obamacare. /more/
  • Sex and the White House

    October 4, 2016
    Ernest Dumas' column this week muses on Donald Trump's vow to make the race about Bill Clinton's history despite the fact that Trump is "the most debauched political candidate in the history of public licentiousness." /more/
  • Donald Trump declares war on Hillary Clinton's marriage

    October 1, 2016
    Donald Trump gave a remarkable interview to the New York Times yesterday in which he declared open season on the marriage of Bill and Hillary Clinton and Bill Clinton's past infidelity. Seems like a loser, but I've been wrong before. /more/
  • More »

Comments

Subscribe to this thread:

Add a comment

More by Ernest Dumas

  • Fake news

    So fed up was young Edgar Welch of Salisbury, N.C., that Hillary Clinton was getting away with running a child-sex ring that he grabbed a couple of guns last Sunday, drove 360 miles to the Comet Ping Pong pizzeria in Washington, D.C., where Clinton was supposed to be holding the kids as sex slaves, and fired his AR-15 into the floor to clear the joint of pizza cravers and conduct his own investigation of the pedophilia syndicate of the former first lady, U.S. senator and secretary of state.
    • Dec 8, 2016
  • Fake economics

    Fake news is a new phenomenon in the world of politics and policy, but hokey economic scholarship has been around as long as Form 1040 and is about as reliable as the news hoaxes that enlivened the presidential campaign.
    • Dec 1, 2016
  • China in charge

    Let's turn to foreign affairs to see how we might calm the flood of anxieties over the coming Donald Trump presidency.
    • Nov 24, 2016
  • More »

Readers also liked…

  • Religion as excuse upends Constitution

    Tirades over religious liberty since the U.S. Supreme Court legalized same-sex marriages nationwide have awakened the ghost of James Madison, the author of the constitutional doctrine on the matter, and it isn't happy that his effort to protect religious inquiry in America is being corrupted.
    • Jul 9, 2015
  • Guns, God and gays

    Many more mass shootings like the one last week in Roseburg, Ore., will stain the future and no law will pass that might reduce the carnage. That is not a prediction but a fact of life that is immune even to Hillary Clinton.
    • Oct 8, 2015
  • AEC dumps ALEC

    No matter which side of the battle over global warming you're on, that was blockbuster news last week. No, not the signing of the climate-change treaty that commits all of Earth's 195 nations to lowering their greenhouse-gas emissions and slowing the heating of the planet, but American Electric Power's announcement that it would no longer underwrite efforts to block renewable energy or federal smokestack controls in the United States.
    • Dec 17, 2015

Most Shared

  • World leaders set to meet in Little Rock on resource access and sustainable development

    Next week a series of meetings on the use of technology to tackle global problems will be held in Little Rock by Club de Madrid — a coalition of more than 100 former democratic former presidents and prime ministers from around the world — and the P80 Group, a coalition of large public pension and sovereign wealth funds founded by Prince Charles to combat climate change. The conference will discuss deploying existing technologies to increase access to food, water, energy, clean environment, and medical care.
  • Rapert compares Bill Clinton to Orval Faubus

    Sen. Jason Rapert (R-Conway)  was on "Capitol View" on KARK, Channel 4, this morning, and among other things that will likely inspire you to yell at your computer screen, he said he expects someone in the legislature to file a bill to do ... something about changing the name of the Bill and Hillary Clinton National Airport.
  • Fake news

    So fed up was young Edgar Welch of Salisbury, N.C., that Hillary Clinton was getting away with running a child-sex ring that he grabbed a couple of guns last Sunday, drove 360 miles to the Comet Ping Pong pizzeria in Washington, D.C., where Clinton was supposed to be holding the kids as sex slaves, and fired his AR-15 into the floor to clear the joint of pizza cravers and conduct his own investigation of the pedophilia syndicate of the former first lady, U.S. senator and secretary of state.
  • Reality TV prez

    There is almost nothing real about "reality TV." All but the dullest viewers understand that the dramatic twists and turns on shows like "The Bachelor" or "Celebrity Apprentice" are scripted in advance. More or less like professional wrestling, Donald Trump's previous claim to fame.

Latest in Ernest Dumas

  • Fake news

    So fed up was young Edgar Welch of Salisbury, N.C., that Hillary Clinton was getting away with running a child-sex ring that he grabbed a couple of guns last Sunday, drove 360 miles to the Comet Ping Pong pizzeria in Washington, D.C., where Clinton was supposed to be holding the kids as sex slaves, and fired his AR-15 into the floor to clear the joint of pizza cravers and conduct his own investigation of the pedophilia syndicate of the former first lady, U.S. senator and secretary of state.
    • Dec 8, 2016
  • Fake economics

    Fake news is a new phenomenon in the world of politics and policy, but hokey economic scholarship has been around as long as Form 1040 and is about as reliable as the news hoaxes that enlivened the presidential campaign.
    • Dec 1, 2016
  • China in charge

    Let's turn to foreign affairs to see how we might calm the flood of anxieties over the coming Donald Trump presidency.
    • Nov 24, 2016
  • More »

Visit Arkansas

View Trumpeter Swans in Heber Springs

View Trumpeter Swans in Heber Springs

Magness Lake, in Heber Springs, is a magnet for swans

Event Calendar

« »

December

S M T W T F S
  1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30 31

Most Viewed

  • Reality TV prez

    There is almost nothing real about "reality TV." All but the dullest viewers understand that the dramatic twists and turns on shows like "The Bachelor" or "Celebrity Apprentice" are scripted in advance. More or less like professional wrestling, Donald Trump's previous claim to fame.
  • Stay the course

    I am frustrated and angry with those who claim the only chance of future success is for the Democratic Party, especially in the South and Midwest, to abandon speaking directly to women and people of color and the LGBT community and instead focus on the economy and other "more comfortable" topics in order to win back some of the center.
  • Fake news

    So fed up was young Edgar Welch of Salisbury, N.C., that Hillary Clinton was getting away with running a child-sex ring that he grabbed a couple of guns last Sunday, drove 360 miles to the Comet Ping Pong pizzeria in Washington, D.C., where Clinton was supposed to be holding the kids as sex slaves, and fired his AR-15 into the floor to clear the joint of pizza cravers and conduct his own investigation of the pedophilia syndicate of the former first lady, U.S. senator and secretary of state.

Most Recent Comments

  • Re: Reality TV prez

    • Far from being the people's choice, Trump eked out the narrowest electoral win in U.S…

    • on December 8, 2016
  • Re: Kids count, not confidentiality

    • Public awareness saves lives
      Confidentiality kills children

    • on December 8, 2016
  • Re: Worth it

    • And loyal, to a fault.

    • on December 6, 2016
 

© 2016 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation