Comments on: The Fictional Surplus - A Twisting of Facts http://www.nevdull.com/2007/01/02/the-fictional-surplus-a-twisting-of-facts/ Sharing my awesomeness just a little bit at a time. Mon, 08 Sep 2008 09:31:16 +0000 http://wordpress.org/?v=2.6 By: ibanix http://www.nevdull.com/2007/01/02/the-fictional-surplus-a-twisting-of-facts/#comment-98 ibanix Wed, 17 Jan 2007 02:11:46 +0000 http://www.nevdull.com/2007/01/02/the-fictional-surplus-a-twisting-of-facts/#comment-98 Nerf and John are both correct. This was a year-to-year budget surplus; for those years our federal income was greater than the federal debt (for the YEAR). It is like saying you balanced the checkbook and had positive cash flow, instead of putting more on the credit card. Meanwhile, you may still be accruing interest on your credit. What did we do with the extra cash? We paid back debt taken out by the public, in the form of Federal Bonds, Savings Bonds, TIPS, etc. This means if you bought one of those, it may have been 'called' early, for less than face value. The Intragovermental Debt is misleading. The gov't is /required by law/ to invest certain funds (like Social Security) into... Federal Securities! It's just a closed circle saying we have outstanding obligations which have not yet been met. The number increases because more people need social security; but we also get more people to tax as the population rises. Nerf and John are both correct. This was a year-to-year budget surplus; for those years our federal income was greater than the federal debt (for the YEAR).

It is like saying you balanced the checkbook and had positive cash flow, instead of putting more on the credit card. Meanwhile, you may still be accruing interest on your credit.

What did we do with the extra cash? We paid back debt taken out by the public, in the form of Federal Bonds, Savings Bonds, TIPS, etc.

This means if you bought one of those, it may have been ‘called’ early, for less than face value.

The Intragovermental Debt is misleading. The gov’t is /required by law/ to invest certain funds (like Social Security) into… Federal Securities! It’s just a closed circle saying we have outstanding obligations which have not yet been met.

The number increases because more people need social security; but we also get more people to tax as the population rises.

]]> By: John in IL http://www.nevdull.com/2007/01/02/the-fictional-surplus-a-twisting-of-facts/#comment-47 John in IL Wed, 03 Jan 2007 18:50:47 +0000 http://www.nevdull.com/2007/01/02/the-fictional-surplus-a-twisting-of-facts/#comment-47 As you pointed out in your post, by spending the trust fund surpluses (either on government expenses or paying down the public debt), intragovernmental debt increases. It also increases because of interest paid on intragovernmental holdings (paid for by the government issuing more bonds to itself). The government can't "save" trust fund surpluses beyond investing in its own government securities (increasing intragovernmental debt). As you pointed out in your post, by spending the trust fund surpluses (either on government expenses or paying down the public debt), intragovernmental debt increases. It also increases because of interest paid on intragovernmental holdings (paid for by the government issuing more bonds to itself).

The government can’t “save” trust fund surpluses beyond investing in its own government securities (increasing intragovernmental debt).

]]> By: NevDull http://www.nevdull.com/2007/01/02/the-fictional-surplus-a-twisting-of-facts/#comment-45 NevDull Wed, 03 Jan 2007 04:33:17 +0000 http://www.nevdull.com/2007/01/02/the-fictional-surplus-a-twisting-of-facts/#comment-45 So I looked into it a bit. I'm still confused as to how taking in more than you spent can possibly lead to an increase in debt. Is this like being EBITDA positive? On an operating basis, we did well, but still couldn't pony up the interest payments, so the total debt still increased? So I looked into it a bit. I’m still confused as to how taking in more than you spent can possibly lead to an increase in debt.

Is this like being EBITDA positive? On an operating basis, we did well, but still couldn’t pony up the interest payments, so the total debt still increased?

]]> By: John in IL http://www.nevdull.com/2007/01/02/the-fictional-surplus-a-twisting-of-facts/#comment-44 John in IL Wed, 03 Jan 2007 03:22:12 +0000 http://www.nevdull.com/2007/01/02/the-fictional-surplus-a-twisting-of-facts/#comment-44 Nerf is right. We had a budget (cash) surplus for a few years. The government took in more money than it spent for those years. The federal government uses a cash (as opposed to an accrual)accounting system. This is more a matter of defitnitions. Both parties play this game and hope that the general public isn't smart enough to actually understand what they are talking about. Nerf is right. We had a budget (cash) surplus for a few years. The government took in more money than it spent for those years. The federal government uses a cash (as opposed to an accrual)accounting system.

This is more a matter of defitnitions. Both parties play this game and hope that the general public isn’t smart enough to actually understand what they are talking about.

]]> By: Nerf http://www.nevdull.com/2007/01/02/the-fictional-surplus-a-twisting-of-facts/#comment-43 Nerf Tue, 02 Jan 2007 19:08:29 +0000 http://www.nevdull.com/2007/01/02/the-fictional-surplus-a-twisting-of-facts/#comment-43 Perhaps they mean a budget surplus? Perhaps they mean a budget surplus?

]]> By: Caydel http://www.nevdull.com/2007/01/02/the-fictional-surplus-a-twisting-of-facts/#comment-42 Caydel Tue, 02 Jan 2007 19:03:50 +0000 http://www.nevdull.com/2007/01/02/the-fictional-surplus-a-twisting-of-facts/#comment-42 I appreciate the point you are trying to make. It is frustrating trying to argue with someone whose head is filled with the media's interpretation of politics with no independent fact-checking of their own. People are gullible beyond belief when they see something on TV or read it in an article. In light of the theme of the above article, have anything to say about Michael Moore? :P I appreciate the point you are trying to make. It is frustrating trying to argue with someone whose head is filled with the media’s interpretation of politics with no independent fact-checking of their own. People are gullible beyond belief when they see something on TV or read it in an article.

In light of the theme of the above article, have anything to say about Michael Moore? :P

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