The stars must be aligned to foist the constellation anaticula into the Zeitgeist: for the Duck, otherwise known as “the canard” casts its ghoulish light over our sublunary world. Four times in the past week someone has written to inform me that (I pick one formulation of the falsum anaticula) “when Bill Clinton left office there was a government surplus, it was the Bush administration  that turned that into a deficit . . .”

This is a canard one hears almost as frequently as this election- year staple: that Newt Gingrich, heinous fellow, asked a former wife for a divorce while she languished in hospital, dying of cancer.  What a terrible man, eh? Except that the story isn’t true, as even the most cursory research (e.g.,  The Gingrich Divorce Myth) would show.

But research, even the cursory sort, isn’t as much fun as simple repetition, especially when there’s a reputation to ruin, smugness to be enjoyed, or a political point to score.

So it is with “Clinton delivered a surplus to George Bush in 2000” canard. You can discover this by going to the monthly statements published by the U.S. Treasury. “But wait,” you say, “that chart linked shows a surplus of  more than $200 billion! It’s right there in black-and-white: $236 billion and the word ‘surplus.’ So there.”

Not quite “there,” actually. That $236 billion is only one part of a larger puzzle, the bottom line of which is the total national debt, which grew every year under Clinton.  Talk of a “surplus” is possible only because of accounting legerdemain.  The economist Craig Steiner has put the case more clearly than anyone I know in a series of articles: “The Myth of the Clinton Surplus,” “The Myth of the Clinton Surplus, Part II,”  and “The True Federal Deficit.” In the second article, Mr. Steiner casts his beady eye upon that $236 billion and  explains how the national debt is calculated:

If there’s a $236 billion surplus then most people would think the national debt would go down by $236 billion. Instead it went up by $18 billion [in the year 2000]. This is the difference that must be explained.

Public Debt is calculated by taking the previous year’s public debt and adding the total unified budget deficit (or subtracting the surplus), and then adding any “other means of financing.”

Intragovernmental Debt is calculated by taking any trust fund surpluses and adding it to the previous year’s intragovernmental debt.

 

Total National Debt is calculated by adding the public debt to the intragovernmental debt. As a result, the national debt can increase even when the public debt decreases if the intragovernmental debt increases by a larger amount.

Why? When a trust fund (such as social security) takes in more money than it pays out in benefits, it takes the extra money and “invests” it in government bonds. Essentially social security says “We received $100 billion in social security contributions but only paid out $80 billion in benefits, so we take the extra $20 billion and buy U.S. government bonds.” Social security doesn’t keep the extra cash but rather loans  it to the U.S. government and, in return, it gets a U.S. government bond. That means the U.S. government can immediately spend that $20 billion on normal government operations but owes that $20 billion to Social Security. [My emphasis.]Hence one part of the government (the U.S. Federal Government general fund) owes $20 billion to another part of the government (Social Security). That is intragovernmental debt.

 

Mr. Steiner has a homely but clarifying analogy that explains this:

 If in a given year you earn $30,000 and a friend loans you $5,000, and you spend $32,000, is that a surplus? While you can claim “I received $35,000 and only spent $32,000, thus I have a surplus,” that’s a pretty weak argument when you know that $2,000 of the money you spent was actually borrowed and has to be paid back later. That’s pretty much what happened in 2000.

The bottom line: a real surplus would cause the total national debt to decrease. The total national debt did not decrease under Clinton: on the contrary it rose ever year.  Ergo, etc.

This is not a partisan issue, by the way. The Clinton administration is not the only one to have engaged in such deceptive accounting reporting. As Mr. Steiner notes, “all modern presidents have.” He lays it all out in “The True Federal Deficit,” where he trace the national debt from 1978 to 2008. “Every year,” he notes “the ‘official’ claimed deficit is smaller than the amount by which the national debt went up. This is true under both Republican and Democrat presidents. Sometimes the differences between the two are smaller and sometimes they are larger, but the real deficit (calculated by the amount the national debt increased) is always larger than the deficit the government claimed.”  Here it is, President by President:

 * The sum of all Carter’s claimed deficits was $252.709 billion but the national debt went up by $299.015 billion.

* The sum of all Reagan’s claimed deficits was $1.412228 trillion but the national debt went up by $1.859576 trillion.

* The sum of Bush Sr.’s claimed deficits was $1.035646 trillion but the national debt went up by $1.554057 trillion.

* The sum of Clinton’s claimed deficits and surpluses actually resulted in a net surplus of $62.904 billion but the national debt went up by $1.395974 trillion–only 30% less than the increase during the Reagan administration.

* The sum of George W. Bush’s claimed deficits (through fiscal year 2008) was $2.131405 trillion but the national debt went up $4.217262 trillion.