In the US Presidential race, much of George W. Bush and Al Gore's electoral sparring has centered around how best to use the federal budget surplus. Unfortunately, there is no clear consensus on how large this surplus is.

The Democrats have recently estimated the total on-budget surplus (that is, net of the current surpluses generated by Social Security) at $1.879 trillion for the 2001-10 period, relying on the economic assumptions of the Office of Management and Budget (OMB), an agency within the Executive branch. The Republicans, on the other hand, have relied on the estimate of the Congressional Budget Office (CBO) of an on-budget surplus of $3.387 trillion over the same period. Of course, each agency has been accused of partisan bias.

While both estimates are predicated on differing economic assumptions (such as predicted increases in inflation and gross domestic product), both assume that total on-budget spending will continue to rise according to current statutory spending caps through 2002, and at the rate of inflation thereafter. It is interesting to note that the CBO has recently completed a study which suggests that they have posted a better economic forecasting record than the OMB. Review this study at http://www.cbo.gov/showdoc.cfm?index=2241&sequence=5.

If there is a numerical battleground in this election, it is the difference between the OMB and CBO estimates. Gore, for example, has called for $500 billion in targeted tax cuts over the 2001-10 period, while Bush pledges to enact a $1.3 trillion across-the-board tax cut. Gore's characterization of Bush's plan as "risky" seems to make sense if you accept the OMB estimate, while Bush's charge that Gore's tax cut is too small seems to make sense if you accept the CBO estimate.

This is certainly one of the more complex issues American voters will have to consider as Election Day approaches; all the more so because there is no statistical consensus.

Sources: CBO (7/18 Update), OMB's Mid-Session Review, www.algore2000.com, www.goergewbush.com

Instead of trying to decide who has the right numbers, why not just keep in mind the number that nobody talks about, because they can't spin it the way they want to: total debt.

Now, I may be a bit simpleminded; I don't have an accounting education, and my name's not Arthur Andersen. But when I look at the amount of money I owe now, and compare it to what I owed a year ago, I won't say I've run a surplus if I owe more now, and I won't say I've run a deficit if I owe less.

According to the Treasury Department, the total debt of the government of the United States in 1985 was 1.817 trillion dollars; the number for 2001 was 5.770 trillion. Every single year during that range, the debt increased. What does that mean? NO SURPLUSES.

But don't bother asking your Congressman, Senator or President about that. They'll tell you about how the government has been in surplus since 1998. They'll wave their hands in the air and mumble on-budget. If you're looking particularly gullible, and you have something to bribe them with, like a million potential voters from your labor union or other organization, they might even wander off-budget and tell you that there's been a surplus every year since 1985, and in fact it grew from 9.4 billion dollars then to 346.8 billion in 1998! (Why that would be considered a good thing is beyond me.)

Don't let their chicanery distract you from the real issue: the government is in debt up to their (our) eyeballs, and a goodly amount more than that, and more so with every passing year.

When will people realize that government can't be trusted with their money in the first place? Demopublican, Republicrat, it makes no difference.


You can see the numbers at http://www.publicdebt.treas.gov/opd/opddload.htm

Well so much for that.

Looking back, it is laughable to imagine that there ever was this whole notion that there was going to be a perpetual surplus, that the question of the hour was whether to "rein it in" by only half a trillion dollars, or by a trillion and a half.

Naturally, all of this arguing was before we knew that the nation was gearing up to incur $7 trillion in war debt over the next decade and change, or that trillions more dollars in bailouts and handouts and safety nets and "foreign aid" were on their way out the door. History happens.

This presents a perpetual psychological problem. The nation, like a household, racks up debts, and when it comes into a bit of money, such that its income for a month exceeds its expenses for that month, it acts, its people act, as if this signals a permanent guarantee of future excess income. And so, plans are immediately made to spend all this excess income, in perpetuity (forget paying off any existing underlying debt). And, naturally, everybody in the household gets in on the spending-the-excess act, without paying much attention to what the others are doing along the same lines, so that the same excess is spent many times over by many different members of the household.

The moral of this story, really, is that there simply is no such thing as a "surplus" so long as there is a debt. There is only the danger of the rhetoric of mislabeling something as such.

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