For years, I have heard people talk about how Bill Clinton left office with a budget surplus and how George W. Bush turned it into a HUGE deficit.  Believe me, I’ve heard it again and again and again.  While it’s true that Bush spent money like a drunken sailor on shore leave and that’s no lie, it is absolutely FALSE that Bill Clinton left office with a budget surplus.  That’s a lie promoted by the Clinton Administration and repeated by Clinton cronies in the media as well as the Clinton Kool Aid drinkers.

For anyone taking the time to do some basic research, it would soon become apparent that the “Clinton budget surplus” isn’t so much of a “surplus” as it is an accounting maneuver.  It informal terms, the “books were cooked.”  You see, the national debt is made up of two parts, the Public Debt (which the government owes the people) and the intragovernmental holdings (which the government owes itself).  Both of these things make up what we affectionately call the national debt.

During the end of the Clinton Administration, certain funds were reallocated from the public debt to intragovernmental holdings, thus allowing Clinton to claim that the public debt went down (which is true), but the national debt as a whole continued to go up.

Think of it this way.  Let’s say you usually pay most of your bills with your checking account, but this year you decide to take out a huge loan from your 401K (assuming that there is any money left in it).  Now, you pay some bills with your check book, but you pay others from your 401K loan.  At the end of the year, you hold up your checkbook and say, “Look at me, I’ve still got money left in my checkbook.”  While that may be true, it fails to take into account that you still owe many of your bills to your 401K loan.  It’s simply “smoke and mirrors.”

For years, I’ve been trying to find a way to explain this to people, but I’m just not good at breaking this down.  Fortunately, I recently found a website that does a much better job than I ever could.  Here’s the URL:

http://www.craigsteiner.us/articles/16

Check  it out.  You’re sure to be enlightened.