the Largest Surplus in History

Max Sawicky sawicky at epinet.org
Mon Sep 27 10:10:18 PDT 1999



>>>>
Turning Around Decades of Deficits to Achieve a Budget Surplus of At Least $115 Billion - the Largest Surplus Ever. In 1993, President Clinton put in place a three-part economic strategy to cut the deficit to help reduce interest rates and spur business investment; to invest in education, health care, and technology . . .
>>>

mbs: As share of GDP, Clinton spends less than George Bush on non-defense public investment.


>>> . . .
Spending Restraint Has Been Key to Ushering in an Era of Surpluses

- Federal spending smallest share of economy since 1974. The spending restraint under President Clinton has brought spending down from 22.5 percent of GDP in 1992 to less than 19.3 percent of GDP in 1999. . . .
>>>>>>>>>>>>>>>>

mbs: According to Congressional Budget Office, cumulative deficits from FY93-98 inclusive were projected at $1,849 billion and came in at $682 billion. Of the $1,167 billion reduction, only $194 billion can be attributed to legislated reductions in spending, and of that only $63 billion to discretionary spending (which means the budget caps were completely inconsequential). The revenue effect -- Bill's big big tax increase in 1993 -- was $230 billion.


>>>> . . .
These Surpluses Have Led to Debt Reduction and Helped Strengthen of the Economy.
>>>

mbs: Private Investment/GDP right now is about where it was in 1992, before the Glorious Deficit Reduction crusade.


>>>
Lower Mortgage Rates And A Brighter Economic Future. Here?s what the improved fiscal situation means to typical families:

- Lower interest rates provide the effect of a $2,000 tax cut to families with a $100,000 mortgage. . . .
>>>>

mbs: Except that neither CBO nor the Administration project falling rates over the next decade, notwithstanding their projected liquidation of the national debt!



More information about the lbo-talk mailing list