Ah, my favorite topic. Actually the surplus could be interpreted as larger than your number. $70 is a cash-flow amount, and only pertains to the Feds. The states run an aggregate surplus themselves (and have for years). Then there are all the arguments by my hero Robert Eisner, collected in his excellent books (recommended to all thinking proletarians: The Misunderstood Economy). One is that the deficit or surplus should reflect capital investment by the public sector: investment spending is not counted as current expenditure, and depreciation of physical capital is. This is in fact done in the NIPA accounts.
The NIPA public sector surplus (Federal, state and local together) for calendar 1997 was $134 billion for the states, and -$21B for the Feds, for a net well in excess of the Feds current fiscal year $70B.
Another adjustment Eisner suggests that is not in the accounts is a deduction for the reduction in the real value of public debt due to inflation.
On the other hand, the accounts do not reflect any 'green' considerations, though one of the minor achievements of the Clintonoids is to promote research into this by the Commerce Dept.
>No wonder the WSJ is screaming for a tax cut. They
>want more money for fat cats to invest abroad.
I think they are of two minds about this. Surpluses reduce public absorption of credit, which gives the private sector more to play with, and promotes deflation with all that that implies, as discussed here previously. Traders may not care whether they are dealing with IPO's, old shares, public bonds, or private ones. I wouldn't know about that. The tax cut motive stems more, I think, from a desire to just shrink the public sector altogether.
>I'm sure Doug could do better with the stats, but
>that's my rough 'n' ready calculation. Let me note one
>more thing. Since we can view the surplus as
>nationalized savings, why not invest it in the stock
>market, and shore up sagging equities, partially
>nationalizing capital in the process.
There's an excellent chance this is what in fact will occur, if the Social Security surplus is used to buy stocks. This issue has been ventilated here before so I won't elaborate.
Otherwise, you don't need a surplus for this in any case. You just print bonds and trade them for stocks.
State and local governments already own a good bit of "the means of production" and the revolutionary, or even radical implications of this are doubtful. Passive public investment is more like gas-and-water socialism. Not awful, but no big deal.
One of these days I'll regale you with my rap about why public ownership of enterprise is not very different either.
Cheers,
MBS