On January 23, 2001, Harry Browne published an article titled “It’s Still the Economy Stupid”. Clinton had just left office and there were a lot of myths about the economy during his two terms. Unfortunately, looking back now, as horrendous as things were during the Bill Clinton era, they have been far worse under Bush and Obama since that time.
One of the myths that Harry Browne explodes is that of the supposed budget surpluses. He pointed out that the debt was increasing every year, even though people were claiming there were surpluses. This was an accounting gimmick. At that time, there was a surplus coming from Social Security. The amount being paid out to retirees was less than what was being collected from payroll taxes. This surplus money was being used to show a budget surplus, even though this money is supposed to be part of the Social Security trust fund, earmarked for Social Security payments.
In that article, Browne quotes Clinton saying that “we’re on a path to pay off the entire debt by the end of the decade.” This was completely impossible, even at that time, especially since there was no way we were going to see any reduction in overall government spending.
Democrats today like to blame the huge deficits under Bush on the modest income tax cuts. But this is not the reason we saw massive deficits. The reason is that Bush and Congress spent money like crazy, including on two disastrous wars.
Of course, Obama has been a complete disaster too, keeping the spending as high or higher as when he took office, which was already at astronomical levels. When we look at $100 billion deficits from the Clinton era, this sure does sound good compared to $1 trillion deficits under Obama. This isn’t an excuse for Clinton or Congress during that time. It is just to say that things are even worse now.
I particularly like the part of Harry Browne’s article where he gives his thoughts on a farewell address for a Libertarian after having completed one term as president. Browne’s versions goes as follows: “Do you remember when the government was so large that you had to pay income tax? Remember when Social Security was eating up your retirement funds, and they wouldn’t let you out of it? Remember when the drug war was tearing up your city? I rest my case. I’m going home now and watch TV.”
I’m not sure if even a Libertarian president could accomplish all of that in one term. But if anyone ever did accomplish this, it would have to be done by somebody who emulates Harry Browne.