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Open the Lockbox: Has the Budget Surplus Outlived Its Usefulness Already?
Barron's ^ | 10 September 2001 | By Thomas G. Donlan

Posted on 09/09/2001 6:31:23 PM PDT by shrinkermd

Edited on 04/22/2004 11:45:30 PM PDT by Jim Robinson. [history]

It was Richard M. Nixon who so famously, erroneously and cynically declared, "We are all Keynesians now," to ratify a national experiment with substantial deficit spending and inflation in time of recession. The inflation lasted one decade, through Republican and Democratic administrations, creating good times at first and then very bad ones. The deficits lasted longer, nearly three decades through Republican and Democratic administrations, through bad times good.


(Excerpt) Read more at interactive.wsj.com ...


TOPICS: Business/Economy; Editorial
KEYWORDS:
"Lock Box" is a form of political insanity not supported by reality. One can expect very little from political pundits and politicians who believe in this term. It is not surprising since many of them are not able to KYPIYP.
1 posted on 09/09/2001 6:31:23 PM PDT by shrinkermd
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To: shrinkermd
There is no surplus.

There was no surplus.

There will be no surplus.

It was a political convenience of the Bush crowd to play along with the Clinton conceit of a 'surplus', but the fact is it never existed other than in theory and in the media.

In fact the 'surplus' was akin to saying "If I live forever and my salary doubles every year I can quit working today and live like a king.

The Clintonian argument was that things had been so great for so long and would continue this way that we must figure out a way to spend all of this wealth.

I believe Bush's people adeptly played this by turning around Clinton's argument on him: First by giving back the 'overcharge' that created the surplus and now (to preserve the 'surplus') "we must cut taxes and decrease federal spending".

If he can swing it, it's nothing short of a genius ploy.

2 posted on 09/09/2001 7:41:40 PM PDT by IncPen
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To: shrinkermd
I was listening to some of the calls into C-Span this morning and could not believe the stupidity of some of the people calling in about the budget, the "lock box" and the so called surplus. And then I had what I considered to be a great idea.

President Bush should annouce a press conference, wherein he explains in detail just how the government deals with the SS money. IE, it goes into the general fund and gets spent. All the while explaining that although the democrats have repeatedly claimed there is a lock box, there is in fact none, and spending is indeed therefore a threat to future SS recipients.

The solution, a new, bold step for government. Create a lock box, by what ever name it needs to be called, and mandate that EVERY government program, for at least the next 5 years deposit a mere 0.5% of their annual budgets to said lock box. President Bush could go into great detail about a measley half of one percent would not harm any agency, in fact it would hardly be missed by even the smallest of them. He could even offer to double the amount from the White House budget (representing a whopping 1%). And then, present the big picture of the total dollars that would be available for future retirees. He could claim that it all follows along with conservatism, saving money now, for the future to come. Then throw it back to Congress, telling them that if they enacted this program for a longer term, he could see the day when Americans would not have to pay Social Security taxes at all.

3 posted on 09/09/2001 9:31:43 PM PDT by Brad C.
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To: IncPen shrinkermd
There is no surplus - In fact there is a $100 billion deficit:

The Debt To the Penny


    Current                Amount

  09/06/2001        $5,774,086,630,858.16


   Current
    Month

  09/05/2001        $5,769,122,055,290.29
  09/04/2001        $5,761,532,655,812.62

    Prior
    Months

  08/31/2001        $5,769,875,781,034.48
  07/31/2001        $5,718,303,095,621.12
  06/29/2001	    $5,726,814,835,287.17
  05/31/2001	    $5,656,181,958,605.26
  04/30/2001	    $5,661,347,798,002.65
  03/30/2001	    $5,773,739,949,951.53
  02/28/2001	    $5,735,859,380,573.98
  01/31/2001	    $5,716,070,587,057.36
  12/29/2000	    $5,662,216,013,697.37
  11/30/2000	    $5,709,699,281,427.00
  10/31/2000	    $5,657,327,531,667.14

          
  Prior Fiscal
     Years
     
  09/29/2000        $5,674,178,209,886.86
  09/30/1999        $5,656,270,901,615.43
  09/30/1998        $5,526,193,008,897.62
  09/30/1997        $5,413,146,011,397.34
  09/30/1996        $5,224,810,939,135.73
  09/29/1995        $4,973,982,900,709.39
  09/30/1994        $4,692,749,910,013.32
  09/30/1993        $4,411,488,883,139.38
  09/30/1992        $4,064,620,655,521.66
  09/30/1991        $3,665,303,351,697.03
  09/28/1990        $3,233,313,451,777.25
  09/29/1989        $2,857,430,960,187.32
  09/30/1988        $2,602,337,712,041.16
  09/30/1987        $2,350,276,890,953.00

SOURCE:  BUREAU OF THE PUBLIC DEBT

4 posted on 09/09/2001 11:02:27 PM PDT by XBob
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To: Brad C.
good idea bump
5 posted on 09/09/2001 11:05:23 PM PDT by XBob
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To: shrinkermd
Here is a website about the surplus and national debt that I found fascinating. I am still digesting it. One really needs to go through his whole site (see what you think). Here is a little on the surplus issue:


See that red area on the right? That's called socialism</font color>, because it's government ownership of the means of production. Not many politicians are telling you that's where sustained surpluses are taking us, are they</font color>? Read on.

If our leadership in Washington, DC (i.e., if Uncle Sam) continues refusing to return the surplus to the taxpayers, they'll soon have to use those surpluses to buy foreign debt, private sector corporate bonds, and private sector equity. (Alan Greenspan verified this in his testimony to Congress on Jan. 25, 2001.) A few hundred billion dollars a year would easily make Uncle Sam the chairman of the board in just about any private sector corporation I can think of, lickety-split. In other words, the government would become a net lender TO the public and owner OF the public, instead of a net borrower FROM the public.

Not sure about you, but I don't like that scenario. I like capitalism a lot better than socialism. I'd rather keep the "government's debt to the public" right where it is, instead of ending up with a "public's debt to the government." The latter is where we're headed if the government keeps running surpluses. I repeat: When there aren't any more savings bonds or T-bonds to buy back, the government will have to buy corporate bonds, or equities, or foreign bonds, or lend ME money (my own!) -- after they finish vaporizing our bonds. When the government is an owner of the means of production, that's socialism. I looked it up twice, just to be sure I understood what Greenspan was really saying on Jan. 25.

No thanks. I want to keep my savings bonds and T-bonds; I even want to buy more of them. And trust me, they won't be a burden on my children or grandchildren; I guarantee you, my kids would love to inherit those bonds. I hope you feel the same way, and will take a moment to tell your representatives.

Please, let's not pay down the debt. Let's reduce taxes and leave the debt where it is. I need that extra cash; I could use it to pay down my own debts. I also need those bonds. They are the safest investment on the planet. I don't need the government using my own money to (a) take my bonds away from me, then (b) start lending me money.

How about you?

Deficits, the National Debt, and Economic Growth: What many politicians don't want you to know. </font size>

6 posted on 09/10/2001 1:21:51 AM PDT by Aerial
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