WatchI meant to post on this the other day when I heard about it, but catching up now. There was a report in the Clinton administration on what might happen if we paid off the whole debt, as was projected by 2012. Bush, of course, screwed this all up. NPR got the documents through a FOIA request, and posted them.
The chart is priceless:
I believe the chart is just the projection, which was pretty good, although the two successive recessions did make technical changes, if you click on the link at the bottom of the first link I sent.
The interesting thing is the concern that if the US Treasury market disappeared that it might have systemic effects on the global market, since Treasurys are often a liquidity device.
The report is available here:
http://media.npr.org/assets/img/2011/10/20/LifeAfterDebt.pdf
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Nice thought, but basing projections based on what was happening on the top of the tech boom and coming off all the Y2K spending was probably little more than wishful thinking. Not absolving Bush for anything, but try to put a little more thought into your partisan ramblings next time. If you want a complete rubbish analysis of your wonderful chart, note the upward trajectory of the debt after the democrats took the house and see it skyrocket after Obama took office.
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EightBall says
I agree.
I usually add in all the temporary construction jobs from the housing bubble and the Y2K bubble as part of the "Clinton" success story. It's easy to be in charge when the economy is being temporarily propped up.
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EightBall says
The problem is that Obama stopped spending money after the stimulus bill and that was in 2009. (the CBO says health care reform will actually result in a net decrease in the deficit) Nearly all the deficit spending is the result of legislation already on the books and the vast majority of it either dates back many decades or has Bush's signature on it.
You can't blame this on the Democrats unless you are specific about what they did to cause it. Most people leave out that part.
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iwog says
If I were to blame Democrats solely (and I don't) I could blame them for signing a bunch of free trade agreements, doing nothing to throw out illegal aliens, adding regulations, pandering to special interest groups at taxpayer's expense (making us less competitive internationally), and participating in operation "enduring bubble" (I am sure you know what I mean by that, although Bush #2 is probably did more of that).
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zzyzzx says
Democrats are screwups too, but we're talking specifically about the debt.
Democrats have taken one single action to increase the debt, and it was the stimulus bill. Almost all the money went to Americans during a recession and the price was under $1 trillion. EVERYTHING else is the result of past administrations and MOST of it was signed into law by Republicans and MOST of that was either given as tax cuts to the rich or sent overseas to corporations like Halliburton that now pays taxes in Dubai.
Almost the entire national debt can be blamed on Republicans from Reagan onward. This is not just rhetoric, I can prove it beyond any reasonable objections. Furthermore Obama is a very minor player when it comes to spending money. He's been handcuffed by Senate Republicans and what legislation he has gotten through has been pretty cheap compared to things like the Iraq war and Medicare D.
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zzyzzx says
Not true. Higher deportations under Obama. Fact.
zzyzzx says
Please provide a list of regulations the Democrats have added. Should be simple if there are so many just to provide a few.
zzyzzx says
That just doesn't fit with reality. Democrats, if anything, are generally for protectionism more than Republicans. Republicans if anything are generally for free trade agreements than Democrats. Do you know anything about politics?
EightBall says
It's not a partisan rambling. Where in this did I make a single partisan comment? Bet you can't find it. In fact, I almost never make partisan comments because I find them useless and circular.
The reason this article is important to investors is that Treasurys can be an important part of an investor's portfolio. Ignore these sorts of reports at your own peril.
EightBall says
See, that's the partisan comment. Iwog is right that Obama and the Democrats have largely only added the stimulus package as the only increase. Everything else was already committed by past administrations.
Some people here don't really seem to have a grasp of the facts. They only view things through their ideologue-colored glasses. It's not particularly productive.
As iwog said, Democrats surely screw some stuff up too, but you people are too blind to figure out what those things really are.
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eh...it's hard to say.
Government spending is dependent on congress. While the president must create a budget congress is of no legal obligation to pass it blindly.
What happened in the 1990's was gridlock. Republicans wanted tax cuts..clinton blocked them. Clinton wanted spending..republicans blocked it.
We also gained a ton of money from the selling of cell phone spectrum. All of the fees added up. This was something new as there was not as much in the 80's. You also had the dot com bubble.
Let's not also forget much of the corporations that had major scandles were "fine" in the 90's. Enron, worldcom, Adelphia... it wasn't until around 2001/2002 that the reality came into play.
What added up gradually was the bush tax cuts, wars in iraq and afghanistan and the prescription drug bill. Yes tarp and stimulus added to it but the three major ones were the tax cut and wars.
Can some of this be blamed on bush? Sure...but congress went along with both wars. Obama won the primary against hillary saying the war was a mistake and he didn't vote for it. And yet it's taken nearly three years for him to pull the troops out..and Obama also allowed for the tax cuts to be extended.
Both sides sometimes want to court the other parties voters. Republicans did it with the prescription drug bill. Democrats did it by allowing the tax cuts to continue.
Protectionism is iffy as Carter deregulated the airlines, trucking industry (against what Reagan and the teamsters wanted), and rail industry..and some of Patco actually started with him as well. So the path I'd argue was from around 1978 onward with it. We had free labor of movement between california and mexico (Brancero) that operated for 22 years
http://en.wikipedia.org/wiki/Bracero_Program
Republicans haven't really cut government much. Nixon expanded it significantly and Reagan didn't really when you see outright federal employment.
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mdovell says
There was math done on this. TARP added almost nothing, by the way ($16B out of $12.7 trillion). Check out the study from Pew about this: http://www.pewtrusts.org/news_room_detail.aspx?id=85899359317
An NPR blogger reformulated the chart so that the end result is more visible: http://www.npr.org/blogs/money/2011/05/03/135954609/in-01-the-u-s-budget-picture-was-rosy-what-happened
The Washington Post also wrote about it, and has a good info graphic.
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I know what you mean but it still contributed, it might not be statistically important. The vast majorities were from the wars and the tax cuts.
The other thing with a surplus/deficit is that those are for the year. the amount of money owed for the baby boomer generation for medicare and social security is huge..even with that surplus then (or projected by that graph) we would still have debt from those.We're talking tens upon tens of trillions of dollars.
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I believe the chart is just the projection, which was pretty good
Unfortunately, the go-go economy of the late 1990s was just as ephemeral as the later Bush Boom, and I have the chart to prove it:
http://research.stlouisfed.org/fred2/graph/?g=36k
Blue line is annual private debt increase, red line is YOY federal debt increase.
We were pumping $2T/yr of credit money into the economy during the late 90s, and the result was a balanced Federal budget.
Similarly, after the 2001-2003 tax cuts we started pumping $3T then $4T/yr into the economy, producing a slightly declining federal deficit in response.
This was all fake as hell though.
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mdovell says
We don't owe that money, not yet at least.
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Bush imposed more regulations at this point in his presidency than Obama has. That is a fact. The Patriot Act. No Child Left Behind. Sarbanes Oxley. The list goes on.