At the Democratic National Convention, Bill Clinton famously opined that ‘arithmetic’ was the magic trick that enabled him to be the last President to provide a budget surplus.
In 2001, the CBO projected that the total Clinton surplus of about $280 billion would balloon to $5.9 trillion worth of cumulative surpluses through 2011, when in reality the accumulated deficits reached $6 trillion at the end of that time period.
That’s pretty bad arithmetic. So what happened?
The U.S. Treasury Department recently tweeted this chart, which breaks down the major drivers that turned a small surplus into a massive deficit:
Photo: Treasury Department
This chart paints a pretty poor picture of the CBO’s forecasting abilities, which account for well over half of the missing surplus.
While the ‘other annual appropriations’ category could use a little clarity, this chart also hits the nail on the head when it comes to identifying the major deficit drivers:
An extremely large tax cut that failed to pay for itself, two wars on the nation’s credit card, an unfunded expansion of an entitlement program, and general overspending turned what could’ve been a cushy surplus into a huge deficit.
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