Showing posts with label deficit. Show all posts
Showing posts with label deficit. Show all posts

Tuesday, June 12, 2012

Which President Makes it Rain the most?

Can you make it rain like a
President?
Not to long ago I did a post about how the surplus was a fabrication.  This post grew out of this when, while I was constructing the charts I wanted to make my point about the president who actually spent the most I realized that it was for too many charts for a single post.  I decided to segue into post about that previous post.  Well days later I finally have gotten the time to this post.

The question is an interesting one, though there really are only two runners.  Looking at this chart it is pretty obvious who has spent the most during their time as president.


According to this chart, showing the yearly deficit accrued by each president in each year of their presidency, Obama destroys the competition having only occupied the presidency for three years.  However, as I have stated in earlier, measuring deficits alone doesn't show the whole picture.  President Clinton appears to have run surpluses the last four years of his presidency.  But this chart shows the sometimes drastic difference between the two.


This chart compares the total deficit accrued under each presidency, by year they were responsible for the federal budget.  The first President Bush has numbers pretty close together, the deficits he ran each year are equally reflected in the debt added to nations balance sheet.  We see a rather large discrepancy under President Clinton, remember this is when our federal government was raiding our social security surplus and writing I.O.Us.  Republicans would claim it was corruption and dishonesty by a democratic president, yet they cannot escape culpability considering they controlled congress.  Remember fellow citizens, both parties have sold you out loan sharks, never ever forget that. 

 Interestingly enough we see that both Obama and Bush saw rather large increases in the federal debt, Bush would appear to be more 'hidden'.  This would appear to make the second President Bush the most spendthrift president cumulatively in the last 20 years.  This chart shows that President Bush ran the largest increase in our debt in 2007, before the crisis had officially been acknowledge by our government.


Now you will probably ask why President Obama and Bush share a year? The reason is that while Bush was responsible for the 2009 Budget, Obama also passed his economic stimulus plan outside of the federal budget.  This means that we must allocate the share of the debt for 2009.

  
As we can see from this chart, when we allocate the added deficit spending by Obama, that only 41% of the added debt in 2009 falls in his court. And though Obama probably won't beat Bush for the largest increase to the national debt, though the coming second wave in our global crisis might change that, but he has amassed 77% of the debt Bush did in only 3 years as president.  If things continue as they are then Obama will eventually surpass Bush as the president who has increased our national debt the most.


Depending on how you want to skew the research the president who makes it rain the most could either be Obama, for most likely to be the spending champ, or Bush, current reigning champ. But in the end it doesn't matter which man ultimately wins the crown, the end result is a poor one for us.  Debts like this cannot be continued, as the debt acts like an anchor on our economy.

Wednesday, June 6, 2012

The "Surplus" was a lie.

One thing that often came up when I was younger, and still comes up intermittently, is who owned the surplus at the turn of the millennium. Democrats would contend that the strong leadership and bipartisan ability of President Clinton was the result of our financial windfall. Republicans contested that it was the voter revolution of '94 and that the president would never have balanced the budget without a republican congress that held his feet to the fire.  The fact is that neither statement is correct, because the surplus never existed.  Now that may seems an outlandish statement given this chart.


By all accounts that 1990s show a decreasing deficit along with a surplus in the finals years of the last millennium. Many millennials will not remember this, or were simply not old enough to be aware, of the furor this caused.  Everyone had an idea on what we should do with our new budget surplus, it even took hold of presidential debates. Vice President Gore, being the populist that he was wanted to spend it on education and tax cuts. President Bush, being the compassionate conservative he was, wanted to give tax cuts and spend it on education.  As you can see the two had drastically two different views on what we should do. Few understood the truth, the media never bothered to search for it, and the politicians were content to not say anything about it (for the most part there were a few on both sides of the isle that spoke up, but of course they were ignored)

That truth was that there was no surplus.  While it appeared on the surface that our financial situation was improving, beneath the facade it crumbled on.


The chart shows that US Federal Debt never decreased during Clintons Presidency/Republican control of congress.  To further illustrate the difference is another chart.


This chart shows the gross public debt of the United States.  As you can see, there was an increase of the Federal debt every year.  It stands to reason that if we had a budget surplus then we should have either, seen a reduction in the Federal debt as more funds were used to pay down our debt, or, debt levels held steady since no new debt would need to be issued to fund government activities?  What happened?  This happened.



The red line shows the yearly increase to the federal debt, and the green bars shows the difference between the debt and deficit, in other words I.O.Us the federal government wrote out.  The government writes I.O.Us all the time, treasury bonds and treasury bills are I.O.Us.  But there is another I.O.U that I am talking about.

Every American knows that Social Security is a trust fund for the American people. Now trust does not mean trust in the normal sense, it is a legal term.  A trust is a piece of property, or an object, that is held in by another party for the benefit of the principal party.  The logic of a social security trust is that the government will hold on a portion of your paycheck for you.  Now I find the entire concept of social security condescending to the average American, as if they are incapable of saving any money without big daddy government telling them to, but that is a different post. What many Americans do not know is that do to having a large and youthful population we ran large social security surplus. Ideally the government would have left his money alone and saved it for a future when receipts from paychecks alone wouldn't be able to pay promised obligations.  But like a fat kid and cake, the government couldn't keep its hands off of that sweet cash.

The government took the surplus and used it to cover its budget shortfalls.  In return the government wrote IOUs to the American people.  They simply used long term debt, social security IOUs, to pay short term debt. Or to relate it to the lives of everyday Americans; they mortgaged their house to pay their credit card debt.  When viewed in this light it makes the "surplus" squabble of the early millennium look as foolish as a married couple with a 500k mortgage over their heads squabbling on what they should do with the thousand dollars they realized they had in their sons college fund.

To summarize, your government stole, and continues to steal, from you.  I say steal because there is no way the government can pay all of our debts Our social security I.O.Us alone are equal to our entire national debt, and that doesn't include the other 40+ trillion of unfunded liabilities, meaning their are no backing assets behind these debts, outside of social security.  There is no way the government can pay these debts. They will either, default, which means even the illusion of a social security trust fund is no longer maintained, or, they will inflate the money supply to pay the debts. Which is stealing away the value of your dollars ability to pay for the things you need.  There can be no such thing as a surplus when you have debts in excess of your liabilities.  Private finance doesn't work this way, so why do we think government finance does?



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Seattle resident whose real name is Kevin Daniels. This blog covers the following topics, libertarian philosophy, realpolitik, western culture, history and the pursuit of truth from the perspective of a libertarian traditionalist.