“The future is known. It’s the past that keeps changing.”

Friday, December 02, 2011

“The future is known. It’s the past that keeps changing.”
The Soviet Union had a habit of editing and airbrushing history books as a result of Stalin’s purges. One of the most popular jokes among Soviet citizens was: “The future is known. It’s the past that keeps changing.”

Editing the past is one of the favorite past-times of all ideologues, and because Democrats are in charge of academia and the press, the good things that happened in the past are always done by The Left and all the bad things by the Right.

My latest example, brought about by the current concern about government debt and deficits is the myth that “Clinton balanced the budget.” Whether people who write that are simply misled or are lying is immaterial because it’s simply wrong. Clinton was in office when the “budget was balanced” (and I use scare quotes deliberately) and so was Jacques Chirac, the President of France. Neither one is responsible for balancing the Federal budget.

I was there at the time and paying attention. The facts are fairly simple; Clinton came into office with plans that promised deficits as far as the eye could see. Republicans in Congress, led by Speaker of the House Newt Gingrich blasted Clinton for this and made balancing the budget a political priority. The following years provided a gusher of revenue for the government caused by a stock market propelled by the dot.com bubble. Clinton, ever the smart politician, decided to take credit for the inevitable and – having resisted the calls from Congress for a balanced budget for most of his two terms – suddenly had a “road to Damascus” conversion and announced that he was now for a balanced budget. The conversion from spender to budget balancer has two primary reasons: (1) to take credit for a politically popular act and (2) to resist the call for reducing the tax increase Clinton and the Democrats in congress enacted at the beginning of his term.

But back to that so-called “balanced budget” or “budget surplus.” Surprise, there wasn’t one. And this is something I did not realize at the time because I too was fooled by the headlines and the stories in the press. That was a time when people in the financial community were actually worried about a shortage of US Government Treasury bonds! How could we have been so wrong? Well, keep in mind that "smart" investors also believed that dot.com start ups with no earnings and no revenues were worth billions.

So how much did the national debt decline when we were running that fabled budget surplus in the late 1990s? Nothing? You mean the debt actually rose when the papers were full of praise for budget surpluses? How can that be? Let Craig Steiner explain. The BEST year of “budget surpluses” during the Clinton presidency saw the national debt go up nearly $18 billion. After you read this you’ll never again believe either the government or the press. After the dot.com bubble burst and the attack on 9/11 occurred those fanciful “budget surpluses” disappeared.

This will not dispel the myth of the Clinton budget surplus. It’s too valuable to the Democrats and to the press. Remember Comrades, a lie told often enough becomes the truth.