Paul Ryan and GOP fiscal hypocrisy

Discussion in 'Free Speech Alley' started by Tiger in NC, Jun 14, 2012.

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  1. Atreus21

    Atreus21 Founding Member

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    So if I understand correctly:

    Interest on the debt is included in the budget. Clinton's surplus is only arrived at by excluding interest from the budget. Is the correct?
     
    Atreus21, Jul 10, 2012
    #101
  2. red55

    red55 curmudgeon Staff Member

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    No.
     
    red55, Jul 10, 2012
    #102
  3. Atreus21

    Atreus21 Founding Member

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    To which part?
     
    Atreus21, Jul 11, 2012
    #103
  4. red55

    red55 curmudgeon Staff Member

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    Please re-read post 97. I don't know how I can be any clearer. It ain't rocket science.

    Do you have a mortgage? If so, you understand that there is a certain amount of interest due every year. It's not all of the interest you owe, but its the amount that you must pay now. So you figure this anticipated interest payment in your annual budget. Now, you have paid interest in your budget but you still owe much interest and principle. With me so far?

    So last year, you got a big raise (a surplus) and to reduce your debt, you made additional payments to your mortgage, further reducing interest and principle. You still owe a lot of principle and interest, but you have utilized your surplus to reduce it.

    You should stop imagining that the Clinton surpluses were phony. They were not. It is all documented and it has always been calculated the same way. It is on the record. Look it up.

    http://www.factcheck.org/2008/02/the-budget-and-deficit-under-clinton/

    http://articles.cnn.com/2000-09-27/...onal-debt-fiscal-discipline?_s=PM:ALLPOLITICS
     
    red55, Jul 11, 2012
    #104
  5. Atreus21

    Atreus21 Founding Member

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    Yes.

    Then how, despite making additional payments, did my total balance increase?

    The only relevant question is whether or not interest on the debt is included in the budget. As far as I can tell, based on NYT's graphic of Obama's 2013 budget, interest on the public debt is part of the mandatory spending in the budget. Was this true of Clinton's budget or not?

    Furthermore, your argument begs the question: Can every president claim a surplus as long as their deficit was less than the amount of the interest on the debt for that year? In other words, can they all say, "if it hadn't been for interest on the debt, I'd have run a surplus" as Clinton apparently can?
     
    Atreus21, Jul 11, 2012
    #105
  6. red55

    red55 curmudgeon Staff Member

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    Because the additional payments were small compared to the huge amount of the mortgage remaining. You only pay down the debt in increments, not pay off the debt. This is why you end up paying more in interest than you pay in principle on a long mortgage. And the National Debt is ver old and very big.

    Already asked and answered. Anticipated interest due immediately was included in the budget. That is not all the interest still owed.

    It is true of every budget. As is the statement above.

    Of course not! A budget surplus exists when we take in more income than we spend. Period. You are inventing a scenario that never existed.

    You are mistaken to imagine that the budgets under Clinton were calculated any differently than any other president.
     
    red55, Jul 11, 2012
    #106
  7. LSUsupaFan

    LSUsupaFan Founding Member

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    The scenario you are describing is not mathematically possible. Federal notes amortize just like any other debt. If the government is paying the minimum payment , not adding new debt, and making additional payments on the debt it cannot grow. How big and how old the debts are does not matter.
     
    LSUsupaFan, Jul 11, 2012
    #107
  8. Atreus21

    Atreus21 Founding Member

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    If I understand correctly, you're saying that the anticipated interest we budgeted for(let's say $100 billion) was less than the actual interest due at the end of the fiscal year (let's say $220 billion), thus meaning that we had to spend an extra $120 billion beyond what we originally budgeted for.

    Okay, well that brings up two questions:

    First: In fact, was the difference between the anticipated and the actual interest payments sufficient not only to offset Clinton's surplus, but also to make the debt increase higher? We'd need to see Clinton's budget to answer that.

    For an example, by the end of FY 1999, the debt increased from FY 1998's $5.53 trillion to $5.66 trillion: an increase of $113 billion. If your argument is correct, than the actual interest payment due for that year not only had to eclipse the anticipated payment in the budget, but also that year's surplus, by a total of $113 billion.

    IIRC, Clinton's defenders claim that in FY1999 he ran a surplus of $123 billion. If that surplus was applied to the debt, and the debt still increased by $113 billion, than the total amount of actual interest due would have to be $236 billion plus whatever the anticipated payment was. This link:

    http://www.gpo.gov/fdsys/pkg/BUDGET-1999-BUD/pdf/BUDGET-1999-BUD-7-19.pdf

    ...shows what I think is the anticipated payment: $242 billion. That would mean that the actual interest payment for FY 1999 would've had to be $242 billion + $123 billion (the claimed surplus) + $113 billion (the total increase in the debt). That's $478 billion.

    Second: Even if I'm wrong about the above question, it still doesn't mean we can just pretend actual interest payments don't count. That is still spending the government has to make, irrespective of whether it was predicted correctly. All it really means is that Clinton intended to run a surplus, but by year's end the numbers didn't add up the way he thought they would.
     
    Atreus21, Jul 11, 2012
    #108
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  9. Atreus21

    Atreus21 Founding Member

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    I was about to say something similar. The only way my debt load increases without adding any spending is if I stop making payments.
     
    Atreus21, Jul 11, 2012
    #109
  10. LSUsupaFan

    LSUsupaFan Founding Member

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    Right, and in the case of government this is impossible. If the government can't make the minimum payments they must borrow more or increase taxes. The minimum payments are an entitlement, and must be appropriated.
     
    LSUsupaFan, Jul 11, 2012
    #110
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