Treasury Secretary Calls Clinton Budget Surplus "a Mirage"
The graphic below is derived from data provided by the Congressional Budget Office. The value for 2005 is as projected by the CBO. The data used do not take into account the effect of inflation because the essential character of the dynamics of the net federal budget cash flows would not change: positive numbers remain positive, and negative numbers remain negative even when they are adjusted (that is, divided) by an index. Furthermore, "adjustment" methods being used by the Bureau of Labor Statistics on raw price data present certain challenges concerning the accuracy with which the consumer price index and the producer price index are reflecting actual inflation at the retail and wholesale levels, respectively. The essential results of the analysis presented below are nonetheless robust to the choice of nominal or real (i.e., inlfation-adjusted) federal budget figures.
As if gearing up to rewrite history, some neo-conservatives are now claiming that certain government tax revenues were "unusually high" in the last years of the Clinton Administration. This line was delivered by none other than a senior economist from Goldman, Sachs & Co., who was quoted in the Bloomberg article. The claim that some anomaly was behind the Clinton era budget surpluses is entirely out of line with the graphic above and the data, which clearly show not a one-time-only surplus, but a sustained, long-term fiscal discipline that started immediately upon Clinton's ascendancy to the White House and remained the regime in the nation's fiscal house until the very end. Those same numbers demonstrate the sea change that occurred when the neo-conservative policies of tax cuts and war-based fiscal stimulus became policy under George W. Bush.
To highlight the dramatic and incontrovertibly fundamental policy shift toward growth driven by massive federal budget deficits caused by tax cuts, separate linear regression trend lines can be calculated for the respective Clinton and Bush Administrations' net federal budget cash flows.
In the graphic above, the blue line indicates the trend for the Clinton Administration. It has a slope of approximately 70, which means that the federal budget was gaining a net cash inflow of about $70 billion (nominal) annually over the eight years of the Clinton Administration.
On the other hand, the green line indicates the trend for the Bush Administration. It has a slope of about —117, which means that the federal budget deficit has, under the neo-conservatives, been suffering a net outflow of $117 billion (unadjusted) annually, which is opposite to and almost twice the rate of the Clinton Administration's net federal budget trend line slope.
This is no mere "mirage," as Treasury Secretary Snow would have people believe. The trend lines are in opposite directions, and those trend lines represent the cumulative effect of sustained net cash flow changes that reflect, at one level, policy priorities and, at a deeper level the different degrees of responsibility with which two, separate administrations and their politically influential allies have carried out their duties to manage the fiscal house of the federal government of the United States.
The graphic at left below presents the 1993 to 2005 federal budget surpluses/deficits as a percentage of gross domestic product, as displayed in Table 2 at the CBO historical federal budget data Webpage (with the 2005 projected value provided in Table 1-1 at the CBO Webpage presenting current federal budget projections).
Using the same trendline analysis as above (and taking into account a growth of the economy that may be fueled to some extent by creeping inflation in the projection for 2005), the numbers re-inforce those presented above: during the Clinton Administration, net federal budget cash flows grew at an annual rate of 0.90% of GDP; during the current Administration, net federal budget cash flows have been falling at an annual rate of 1.01% of GDP. Again, the trend lines are in opposite directions.The legacy of the Presidency of George W. Bush will be other than that claimed by Treasury Secretary Snow, and his assured insistence that Mr. Bush will have "reduced the deficit" serves no other purpose than to reduce the credibility of an Administration and its supporters who have already materially demonstrated an incapacity to manage fiscal policy in a manner consistent with any reasonable metric of control, care, and responsibility.
The Dark Wraith awaits a time when the nation has leadership that does not defend its mismanagement by claiming a better President's results were a mirage.
Published 12/23/2005 02:09:00 PM
<< 17 Comments Total
Jesus cripes! These morons would be kicked out of special education classes for not even meeting the basics of cognitive thinking. Bunch of *&%*& brains.
These people have no recoarse but to lie. Having repaid favors to the wealthy who elected him now Bush has also stripped away cash that should have gone into capital investment by businesses which in turn speeds up the economy by creating jobs.
Good afternoon, Mr. Goat.
When I saw what our beloved Treasury Secretary had said, I thought I was going to pop a blood vessel. There was no real reason for the man to go out on a limb and say something that would make him a laughing stock for public finance historians.
The problem is, I think he's serious. I've been hearing a few rumblings about the "myth" of the Clinton-era budget, and now I'm seeing some of the braver idiots coming out and declaring openly that what we saw wasn't really there.
In other words, Bush's people are crafting a line that goes something like, "We're not the liars; everybody else is!"
The Dark Wraith needs to keep checking his sanity meter to make sure he's actually still on the Reality Team.
Good afternoon, Charlie Potato.
You are right on the money... so to speak. The federal deficits have been sopping up available funds in the capital markets, driving up interest rates, thereby starving businesses of the funds they need for capital investment.
This is the "crowding out effect" that conservatives still to this day howl about; and here we have ol' George and his crew keeping the economy going from the top down by squandering public funds on the very wealthiest citizens through tax cuts and on incompetent, swollen, miserably inefficient behemoth corporations through war and "security" largesse.
Gawd! but it's a great time to be an economist.
The Dark Wraith will be rubbing the Right-wingers' noses in this era for the rest of Eternity.
DW, that of course assumes you continue to have access to data that belies and exposes their false assertions.....
- oddjob
Oh silly me!
Because of the "fake" economic upswing I hold the position I have without a college degree.
Guess I need to resign after nine years of doing this because it never really happened.
Of course it never really happened, elf.
In alternate reality, you've been a neo-conservative's success story, working at progressively higher and higher paying jobs, rising to a position of executive management because of the extraordinary growth in high-paying jobs because of the tax cuts provided to the wealthy, who spend every minute of every day asking themselves, "How can I create millions and millions of big-paycheck jobs for people like elf?"
Yes, elf, it's time to embrace the alternative to reality. You'll be much happier once you do.
The Dark Wraith should take some meds after that.
Good evening, OddJob.
One of my major, long-term, background projects has been collecting data sets.
From a purely practical standpoint, these allow me to do research without constantly having to access online databases.
More importantly for the long haul, I have in my possession relatively untainted data that I can compare to what is out there being represented as "how the data always was."
I do the same thing with literature. I have no use whatsoever for these projects to put every book into electronic format. There's way too much room for tom-foolery with that. We have enough danger of "revised" versions of literature showing up in book form as it is.
It's funny that my life as a tech geek has turned me into one of the most anti-new age technology fanatics around. I swear, by the time my life ends I'm going to be living in a cave with a club to keep me safe and some animal furs to keep me warm.
The Dark Wraith will probably still have a coffee pot and a storage closet for keeping cans of Spam™, though.
DW,
Ugh on the mirage!
Well I just wanted to stop by and wish you a merry and festive Holiday!
Peace!
Hey, Lizzy! Thank you for stopping by to comment.
And if any readers and commenters here don't know about it, Lizzy blogs at The Divided States Of bu$hmeriKa. (I think I got the spelling right, anyway.)
G-o-o-o-d blog.
The Dark Wraith loves good blogs.
Hi DW,
I'm getting highly annoyed at my computer, since I can't even get to you through IE now...I managed to read this commentary by dint of letting Opera crash and reading ahead of each crash, then racing to close the forum page before the comment screen crashed. My last try was to delete my DW cookies, which did no good.
I just always wonder about the kind of people that can spout this kind of misinformation....are they lying bald-faced secure in the knowlege that the sheeple won't notice and no one will correct them until the lie has become reality to too many, or are they capable of self-deception on a grand and magnificent scale and are tell us the "truth" as they believe it is? In other words, are they living in a faith-based reality, or are they snake-oil salesmen come to the revival to skin the rubes?
I only hope I survive them and live long enough for some real historians to come up with answers to questions like this. Either way it sucks for us, but I'm just truly curious about such things. Just like is George Jr an idiot because A)It suits him to appear this way, B) He's played the part so long he's forgotten any other way to act, or C) He's always been an idiot. I can make a case for any of them, and in practical terms it matters naught, but I really would love to know if we elected the criminally selfish or the criminally insane to the WH.
Good evening, Dark Wraith.
You noted that Snow said: that "[President George W. Bush's] legacy will be one of having significantly reduced the deficit in his time."
When I read that line, I thought HA HA HA HA, who would buy such bullcrap? and then I remember that there are many bush sympathizers, still. They will be spewing this swill, and the easily swayed will soon believe it if they hear it often enough. Hopefully, Snow will be called on, to prove, his assertions by many.
Good evening, Wild Clover.
I have met men somewhat like George W. Bush: born of wealth, they are pale, plaster casts of their ancestors; but their privilege propels them, as do their parents and others who see them as more or less than they are. In my experience, men like George W. Bush are inordinately dangerous, but far more dangerous are those who surround them, for they must be served by the most jealous of guardians, lest their own folly be their downfall.
Historical accounts point to men like this. Some of them manage to live out their days unmolested by the ill their protectors have brought to the world. George W. Bush is a venal man because he is covered by venal men. He hasn't the wherewithal—and he never has had—to contemplate another way of being: this is his condition because he is, in his adulthood, not merely the pale plaster cast of his parents, but also the faint shadow of the grim men who protect and use him.
I challenge myself to the question, What would Mr. Bush gain by being other than a small and mean man? Would he have powerful people who would protect him? Does he have the acumen, the intelligence, the strength of personal character to stand as a beacon of the future world, of liberalism, and of power?
Bill Clinton did. George W. Bush does not.
Where be the ranks of powerful interests—and here I mean truly, extraordinarily powerful interests—who stand ready to help the crippled progressive who aspires to great things? I dare say that in legion they exist not. Progressivism has flacid rich people who seem to have no ability to focus their lives, their entire beings, on the acquisition and retention of global political power.
Where is George Soros? Where is Warren Buffet? Where is Ted Turner? Where is this "big, super-connnected dog" or that "rich, liberal fatcat" willing to keep pouring the cash in this way and that, not just over months, but over years and years, grooming multiple seeds to see which ones are vicious enough, or surround themselves with the vicious enough, to rise?
Where is the Richard Melton Scaife of the Left to pour millions and millions of dollars into a campaign over years and years just to the nasty end of destroying one man? Where are the progressives with the hateful venality to recruit thousands and thousands of volunteers to collect signatures for petitions to wreck opponents' political lives?
We stand on principles until we stand before our graves. In the end, we are at once enticed by and falsely hopeful of the prospect of some groundswell of revulsion against those whose ways we know to be wrong and even horrific. But when that groundswell fails to materialize in a timely fashion, we have the nauseating sense that the American people, in their majority will, might be something like the evil men they elect. It might be that there really is a "moral majority" so willing to be ignorant, and so mean in their willful ignorance, that this is what they honestly want.
I hope that's not the case. I hope that we are seeing a suppression of the true majority. I hope that these men are holding power not because they are the expression of the stupidity, venality, and hateful backlash of the many, but because they are the expression of those who can stop the many from speaking their peace.
I hope for that. If it is a matter of "educating" the ignoramuses of the majority that Bush is a bad man, then we are lost: we have spent years and decades "educating" this society's members to the benefits of open, pluralistic, tolerant civil order; and that education has bought us what?—a clear majority who get off on putting people to death, a clear majority so stupid that they think "intelligent design" might be a good thing to teach; a clear majority that believes police are more believable than the citizens they beat; a clear majority that sat in rapt fascination as we opened Hell upon a virtually unarmed, almost completely civilian city called Baghdad; a clear majority that is upset with Mr. Bush only because they think it might be fashionable one day soon, so they want to get in at the front end of the hit parade.
May we be saved from our brethren, for they, themselves, are most unlikely to be our salvation.
The Dark Wraith has pounded his pulpit for a while.
Good evening, Old White Lady.
That, obviously, is the point of the article I have herewith published: Mr. Snow might get a fairly "even-handed" treatment (or no recognition at all) from the mainstream media; but here, the prevaricating puff-hard is not so fortunate. He can take comfort in the certain knowledge that, in the grand scheme of people on Earth, only a miniscule number read this blog. On the other hand, those who do tend to be more willing than many to express their opinions, tend to imagine and hope that they can effect change in the world, and then tend to go out and try to do so in one way or another.
It is not how many people to whom you speak as much as it is the kind of people to whom you speak.
Mr. Snow talks to mainstream media reporters.
The Dark Wraith, on the other hand, addresses those who do not labor under the twin devils of craven cowardice and incessant imbecility.
good morning o dark one.
that was some fine pulpit pounding! what can one do but say, as sarcastically as one can muster, "i'm shocked, shocked i tell you, that a member of bush's cabinet would lie publicly!"
the cold hard ubiquity of reality does seem to be making a dent in the lies and obfuscations of the pasty man and his dark (bad dark, not good dark like yours) supporters.
Now I know I am living in a bizarro world.
Why the hell are these people allowed to make up this kind of bullcrap and get away with it? It's disgraceful and disgusting.
Bush will be known as the President who borrowed more money than all previous US Presidents combined.
Bush will be known for a lot of things like the President who let New Orleans die, The President who destroyed the Environment, and The President who shit on the Constitution.
I guarrantee that one thing President Bush will NOT be known for is deficit reduction. Dream on Sec Snow.
Lest we forget that our current deficit spending is a direct result of Bush's fiscal irresponsiblility.
The least he should be doing is trying to clean up his own mess.
Well, if Bushie manages to reduce the deficit HE's caused by more money than any other president, I'd still bet that his total deficit is a record. So in theory, he could make history as the president who had the worst deficit in history
despite reducing it further than any other president. If I have a deficit of 1000, while the historical high was 500, but reduce it by 400, when no one else has ever reduced it by more than 300, then by Republican logic, you look at it as the biggest reduction in history, rather than being all negative and harping on the actual deficit being the biggest.
It's all in your point of view. What's the term again for what the pugs are so good at, framing? You can bet this is how this will be framed for public consumption. Hey, maybe this was the point to begin with, run the bills up high enough to be able to become a hero by reducing them again.
Sometimes I wish I was actually gullible enough to buy into this shit...I'd be fat dumb and happy like the rest of the sheep.