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01:21 PM on 01/21/2013
“Hence the grand total of federal debt is $16.4 trillion. But we know how to pay it down. The Clinton Presidency showed us how.”

The Dot-Com bubble (1997-2000) and crash (2000-2001) coincides exactly with the Second Clinton Presidency (1997-2001). The bubble economic activity created a few small annual budget surpluses during those years. All of the Clinton surpluses together do not begin to equal the last year’s deficit alone.
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read matt taibbi
Neither left, nor right. Forward!
03:26 PM on 01/21/2013
I would add to it the collapse of the Soviet empire in early 90s which allowed Western companies unprecedented expansion to previously unavailable markets. Clearly a one time phenomenon.
03:39 PM on 01/21/2013
Concur, yet Dem fans of Clinton act as if he was solely responsible for some economic miracle. I find the following comment particularly hilarious: "..fostering job formation programs that increase tax revenues...".
What a big-Govt fantasy world.
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MANOFCOMMONSENSE
The #1 Republican Team? Bush/Shady.WMD?$$
09:46 AM on 01/20/2013
Both Greenspan & Bush jr seen the surplus as a problem? The Republican solution? Give the money back to the tax payer? And increase the debt?? Dont pay down the old 5 trillion dollar debt??
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John Galt2
My life is my own...
03:29 PM on 01/21/2013
What's BHO & Bernanke's answers been?
03:42 PM on 01/21/2013
Once taxes get so high that tax revenues go backwards, then you have a big problem. I'm sure you noticed that Phil Mickelson is in the headlines for considering MOVING from his current abode, because of taxes that are TOO high.
Do you think Govt can do better things with your money than YOU can?
We have no doubt that you donate much of your money, beyond your normal tax return, to the IRS, correct?
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MANOFCOMMONSENSE
The #1 Republican Team? Bush/Shady.WMD?$$
10:31 PM on 01/21/2013
So just give back tax money? Put the rest on the maxed out credit card? And pay more interest? Good ideal? Its ok for Bush to run the debt up? But not Obama? Obama is double of Bush? So was Bush double of Clinton...Now Imagine how much better shape the debt would've been had Bush paid some down to 4 trillion..
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HUFFPOST SUPER USER
MassWG
12:22 PM on 01/19/2013
" Hence the grand total of federal debt is $16.4 trillion. But we know how to pay it down. The Clinton Presidency showed us how. "

Really? Then how come total federal debt ROSE every year under Clinton (as it has since the 50s)?

Revenues were great under Clinton because it was a bubble economy. When the tech bubble burst, the Fed inflated a housing bubble to offset the damage, which then burst to give us our current problems.

We also saw gains from globalization in the 90s. But as many warned, early gains from phony "free" trade would be more than offset by later losses in middle-class jobs.

Even with these two revenue boosters, the total debt rose... as it will continue to, until we monetize it via inflation and destroy the currency.
03:28 AM on 01/20/2013
You are spot on! Thanks for filling in the enormous missing pieces to the very inept analysis of this post. As is always the case with absurd economic "experts," they forget to mention underlying causes and effects. The most important factor is the bubble blowing with fake fiat money, as you pointed out. Clinton also repealed Glass-Steagall and deregulated derivatives, which created the housing bubble, and allowed too-big-to-fail banks leveraging taxpayer insured deposits 50 to 1 until it popped.

The distortion of the real economy by the ridiculous print, borrow, and spend plan has driven the cost of living beyond the public's ability to keep up, and siphoned the hard earned wealth from the middle class and working poor upwards to the monied class. As Clinton's enacted housing bubble popped, so did 40% of Americans wealth. But "economists" never seem to tell that whole story.
03:44 PM on 01/21/2013
Particularly those "economists" found here.....
Linda from Deerfield
Paying attention
09:17 AM on 01/20/2013
The reason you can't find the flattening of the federal debt under Clinton must be that you forgot to correct for inflation. I didn't have any trouble finding it.
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HUFFPOST SUPER USER
MassWG
09:54 AM on 01/20/2013
I simply stated a fact: the dollar amount of the debt rose under Clinton. I did not say it did not flatten. Stopping it from rising is not the same as paying it down.

What many fail to appreciate is that the tax revenues generated during the Clinton years were based in profits that resulted from the leveraging of debt. So even as public debt flattened (and actually dropped a bit, as a % of GDP, or in real dollars), that flattening came about only as a result of a dramatic spike in private debt.

So as public debt flatted, total debt climbed even more rapidly. It is total public AND private debt, which have come down only a little, that together indicate the real problem. In tandem, the system remains far worse than it was before the Great Depression. It's not over.
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John Galt2
My life is my own...
03:30 PM on 01/21/2013
You can thank the Rep Congress Clinton had to deal with for the slowdown in spending increases...
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HUFFPOST SUPER USER
MassWG
12:13 PM on 01/19/2013
"Treasury Bonds, whose yields are hovering near all-time lows"

If we can borrow so cheaply, why is most of our debt short term? Certainly because it is politically expedient (though economically stupid) to keep current interest payment to a minimum and push the true costs of debt service into the future. But perhaps also the fact that if we tried to lock in low rates for 30 years, we wouldn't find the needed lenders.
10:31 AM on 01/19/2013
Not enough money to give to banks and corporations.
01:28 AM on 01/19/2013
Y'all get your stories straight. Two weeks ago Krugman predicted insipid growth.

But, I believe you guys. You tell me interest rates are gonna stay low forever, ok. When we roll those medium term treasuries over in 5-10 years on our debt, by now $20 or $25Trillion, we won't have to pay 3% or 5% right? Interest rates are still gonna be Zero right? We're the frickin' dollar right? We might pay it down right? Our government is responsible right? Ok.

Can you hold me? I'm scurred of heights and especially them hard landings.
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John Galt2
My life is my own...
03:31 PM on 01/21/2013
It's not the fall that'll kill ya...it's the sudden stop at the bottom!
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HUFFPOST SUPER USER
timehack
My micro-bio is an honor student at Westville High
09:35 PM on 01/18/2013
Paying down the national debt means running surpluses, which has never been good for the economy. The last time the US made a concerted effort to pay down the debt was when we ran budget surpluses every year from 1920 to 1930. Ushered in an era of economic prosperity, did it?

The deficit is a surplus for the private economy, and the debt is our savings. What economist thinks those are things we should now give up?
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HUFFPOST SUPER USER
katiec1963
11:36 AM on 01/19/2013
Yes, exactly!!!!

And just to expand:

All dollar assets are created out of thin air. We have a fiat currency.

Dollar assets are: reserves, coins and bonds.

The Fed Reserve creates reserves, the Treasury "borrows" from the Fed Reserve.

The Fed Gov, through "borrowing" from itself, creates private assets - either that IOU (dollar) in your pocket, or a bond in your portfolio (which keep dollar IOU's locked up in a savings account).

I you paid the deficit down to $0, there'd be 0 dollars in the private sector.

While dollar assets (reserves and bonds) are created out of thin air, the interest on bonds is not. The national debt is the interest owed on bonds (and inter governmental "debt").

Coins, also created out of thin air, are interest free, because the Treasury, rather than the Fed Reserve, creates them.

The Fed Gov ISSUES an accounting entry into the private sector in the form of dollars (bonds, coins and dollars).

The Fed Gov deals in accounting -- we deal in objects.

The Treasury is limited to dealing in objects, because it must "borrow" from the Fed Reserve in order to have dollars to spend.

This is why the Platinum coin would work, it would be a way to mark up it's account without having to "borrow" from the Fed. But it still could NOT spend without the authority of Congress.
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HUFFPOST SUPER USER
gerald4
Author
04:08 PM on 01/21/2013
Any printed paper currency, any electronic credits, and/or even a silly new platinum coin made out of a few hundred dollars of Platinum and then labeled as a "Trillion Dollar" coin that sellers would accept to purchase anything of real value such as real estate, jewels, silver, gold, grain, land, farms, casinos, factories, oil, commodities, etc. and any other items that are as valuable as gold and do not decrease in buying value as the paper US Dollar, any platinum US coins, and other US dollar denominated security instruments and securities that decrease in value when the US government prints more and more of these US Dollar denominated paper currency instruments.

A US trillion dollar platinum coin made with 1oz of platinum would still be worth about 9600 yuan (about $1700 today) if it were melted down, and US bonds and T-bills could be used as toilet paper when the US government deficit spending destroys the purchasing value of the US Dollar.

The USA must reindustrialize in order to reverse the negative Foreign Trade Balance before US citizens find their situations hopeless as unemployment increases and the US dollar loses its redeemable (purchasing) value.

Government checks, paychecks, US dollars will then not buy much of anything, and your weekly paycheck might not even buy (or be redeemed for) one loaf of bread in the near future.
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HUFFPOST SUPER USER
MassWG
12:32 PM on 01/19/2013
"The deficit is a surplus for the private economy, and the debt is our savings."

We use that surplus to consume. But note that OUR saving are held by China, Japan, etc. to serve as THEIR savings.

How can our savings be an asset for both us and the central banks that hold our debt? It has to be a liability for someone.

The ability to consume without producing is not something you give up, it is something that is taken away from you. Please explain how we ensure this never happens.
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HUFFPOST SUPER USER
gerald4
Author
03:21 PM on 01/21/2013
The federal deficit is the federal government spending more than they collect in taxes.

This will destroy the value of the US dollar and cause the USA to evolve into something resembling Somalia!
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HUFFPOST COMMUNITY MODERATOR
realitytrumpsbull
Two 'alves of coconut!
07:32 PM on 01/18/2013
Growthies, schmowthies. The size of Con Me isn't the problem, the problem is that despite all this wonderful economic activity, there's still tens of millions jobless in the US. You can grow, grow, and grow the economy all you want, and you're still never going to make headway against that problem, because the population is also growing, by 3 million people per year, approximately. Some people and some industries are faring well, others, not so much. Can we improve things by 'growing the economy'? Well, maybe, if you're a defense manufacturer or something along those lines...
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HUFFPOST SUPER USER
gerald4
Author
03:24 PM on 01/21/2013
Why did all of the high paying manufacturing jobs in the USA relocate for foreign nations in the last few years? Why are the cities that were once the home of the basic wealth creating US industrial manufacturing factories now referred to as the “Rust Belt.”

How can President Obama or anyone else think that any of the big or small US manufacturing businesses could ever even economically justify creating and/or keeping any jobs in the USA if they are hamstrung with many times more expensive labor costs, electrical energy costs that is required to be generated in compliance with the EPA, health care payroll tax costs, unemployment payroll tax costs, social security and medical care payroll tax costs, environmental compliance manufacturing costs, fringe (holiday and vacation) benefit payroll costs, OSHA compliance payroll costs, union labor work rules, anti-business laws, and general anti-business attitudes that make manufacturing products in the USA many times more costly than manufacturing the same product in almost any other foreign country in accordance with the existing US “Free Trade Agreements”?
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HUFFPOST SUPER USER
gerald4
Author
03:24 PM on 01/21/2013
US Businesses that are considering creating or keeping jobs in the USA also consider that while paying US citizens employed in the USA much higher (hourly wages) pay scales that are many times above the wages that they pay foreigners in foreign Asian nations, the businesses must also evaluate and justify in the additional costs of EPA compliance the additional US labor payroll costs that the national healthcare, unemployment insurance, social security, and other federal government payroll taxes add on top of the direct costs of US labor payrolls when economically considering where to locate a new manufacturing facility.
05:51 PM on 01/18/2013
Bond investors view the dollar as a safe haven for two reasons:

1) There's no alternative. The Euro is a slow motion train wreck and the Yuan is the manipulated farce of a police state. With nowhere else to park your money, the dollar wins by default.

2) The Fed is purchasing a substantial portion of our bonds, which artificially increases demand, thus making the dollar more attractive.

We managed to generate budget surpluses during the Clinton years because the largest stock market bubble in US history generated enormous (albeit temporary) revenues from capital gains and other related tax revenues - not because of any specific policies on either side of the aisle. It was a quirk of history, nothing more.

You obviously have a good heart, Mr. Green, and I share much of your sentiment as well as your priorities. But the core of our problem is the same as it is in Europe and Japan: Our societies are simply clogged with too much debt. You may as well refer to Mars when you're referring to the 1950s; there is virtually zero relationship between then and now. Total outstanding debt in this country soared 1500 percent between 1978 and 2008 - that's the problem! It's too much risk and it's unsustainable and since 2008 all we've done is transfer private debt onto the tax payers ledger in the absurd hope that this somehow "fixes" things.

It won't, and it will not end well.
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HUFFPOST COMMUNITY MODERATOR
realitytrumpsbull
Two 'alves of coconut!
07:33 PM on 01/18/2013
Maybe they'll have a divide-by-zero error, and everyone will belatedly realize they've been fighting over nothing. Literally. Germany's smart, they're pulling their gold home...
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HUFFPOST BLOGGER
HarlanGreen
12:45 PM on 01/19/2013
Gold isn't the answer....it limits money supply, which limits growth. Was one of Great Depression causes. Best answer is to fix tax system....When did we grow fastest?....During 1950-60s when tax rates were the highest.
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HUFFPOST SUPER USER
katiec1963
11:44 AM on 01/19/2013
Are you talking about too much private debt, or public debt?

The Japanese are savers. They just keep saving, and public stimulus maintains the balance: Grandma saves, the gov spends to cover her saving's desire, etc...

Japan says it's going to spend past grandma's savings desires. I hope that means they'll give some QE directly to grandma, not just the banks, as they've been doing.

Reserves, bonds, dollars and coins are all base money things. And we create them out of thin air.

What worries me is that they all keep going to banks and their corporate pals, driving up private debt.
02:00 PM on 01/19/2013
Japan used to be savers, but they're right at zero and on the verge of going negative because retirees don't save, they spend, and Japan has the oldest population on the planet, demographically speaking - a situation which is only going to get much, much worse and will aggravate their already staggering public debt.  They've been battling deflation for 20 yrs and now they're going hog wild to create inflation in the hopes that their exports (which have been plummeting) will become cheaper and their debt (as their currency is devalued) less burdensome. It's difficult to imagine this situation ending well, however - for Japanese grandmas or anyone else - because even if they succeed and generate inflation then no one (specifically, their own banks) will want to purchase Japanese bonds/debt unless interest rates rise along with inflation, which would obviously defeat the purpose of... vicious cycle. Any way you slice it, they're a train wreck.  My only (sliver of a) hope is that the US learns from what is happening there (and in Europe) and buys itself enough time to avoid the worst of what they are all inevitably going to experience...