Letter: Economics 101

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October 13, 2012

Letter: Economics 101

The Daily Citizen The Dalton Daily Citizen Sat Oct 13, 2012, 11:35 PM EDT

All politicians seem to know how to present facts in such a way you don’t realize you are hearing only bits of the truth. Democratic strategists have discovered that if they keep telling everyone President Clinton balanced the budget and left a surplus, you won’t inquire what that actually means: the debt grew and no effort was made to bring it down.

In fiscal year 1995, after Republicans won control of Congress, the budget deficit was lowered significantly. (The deficit refers only to how much more the government spends than it takes in.) As pointed out by economist Stephen Moore, that deficit reduction was not due entirely to either President Clinton or the Republican Congress. While it’s true that the balanced budget was formulated because of insistence by Newt Gingrich and eventually signed by the president in 1997, that is not the whole story. Take a quick look at the debt numbers. When Clinton took office in 1993, he inherited a debt of $4.2 trillion. When he left office the debt had climbed to $5.7 trillion. A balanced budget and surplus still raised the debt by $1.5 trillion.

As Democrats crow about “Clinton’s balanced budget,” they neglect to say that the media attributed that balanced budget to Gingrich. In 1995 he was Time Magazine’s “Man of the Year.” They said of him, “All year — ruthlessly, brilliantly, obnoxiously — he worked at hammering together inevitabilities: a balanced federal budget, for one …”

The economy was booming the last two years of the Reagan presidency. Millions of new jobs meant millions more taxpayers. When the Berlin wall came down in 1989, followed by the collapse of the USSR, it signaled the end of the Cold War and a period of world peace. The defense budget was cut by $100 billion, and a world-wide economic boom was beginning. That allowed a Republican Congress to offer a balanced budget.

When President Obama took office in 2009, the debt had grown during George Bush’s eight years to $10.6 trillion. In less than four years, the debt has increased to $16.05 trillion with trillion dollar deficits each year.

The solution that this government has offered as the answer to our current financial disaster is to have the Federal Reserve print more money to feed government-sponsored enterprises like Fannie Mae and Freddie Mac and prop up Wall Street. It isn’t working.

Ina Fay Manly

Dalton

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