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tazzygirl -> RE: Another collapsing State Government (1/4/2011 10:01:41 PM)
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Now let's look at Clinton's tenure. Using the public debt figures, we see that the debt rose year by year during the first four fiscal years of Clinton's stewardship, then fell during each of the following four fiscal years, from a 1997 peak to a 2001 trough.
So using this measurement, Clinton is correct that "we paid down the debt for four years," though he did overestimate the amount that was paid down when he said it was $600 billion. The actual amount was $452 billion -- which was equal to about 12 percent of the existing public debt in 1997.
But what about gross federal debt? On this score, NewsBusters is correct: In each fiscal year from 1993 to 2001, the gross federal debt increased, because the increase in money in government trust funds exceeded the annual decreases in the federal budget deficit.
So by one of these measures, Clinton is correct, and by another, he's wrong.
"The discrepancy between the two concepts of federal debt in these years occurred because of program surpluses and the rapid growth of reserves held by the various trust fund accounts, such as Social Security," said Brookings Institution economist Gary Burtless. Social Security surpluses don't go into a "lock box" but are instead invested in government bonds; the proceeds of these purchases go into the general treasury, and when the bonds mature, the treasury is obligated to pay back the Social Security trust both principal and interest.
"The growth of these surpluses meant the rest of the federal government did not have to issue as much debt to the public," Burtless said. "In fact, the federal government paid off more of its old debt than it issued new debt to the public. Therefore, net federal debt held by the public declined."
http://www.politifact.com/truth-o-meter/statements/2010/sep/23/bill-clinton/bill-clinton-says-his-administration-paid-down-deb/
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