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Y2K Balanced the Budget in the 90’s – NOT Clinton

All the Sunday talk shows came complete with left wing idiots extolling the fiscal virtues of former President Bill Clinton.

“President Clinton balanced the budget as far as the eye can see,” said left wing talking point parrots.

“And he raised taxes!”

The truth is, the one time event we called Y2K – or the Year 2000 bug – balanced the budget in spite of Clinton. How soon we forget (or try to forget).

The last few years of the 90’s saw a panic spree unlike anything else that has ever occurred in the history of the world. People and businesses thought that if they didn’t upgrade to Y2K certified toasters, microwaves and Super Computers the world would end. Planes would fall from the sky, banks would hemorrhage cash from ATM’s like an arterial spew on CSI.

So everybody replaced everything they owned almost down to their electric toothbrushes.

As a result, the economy expanded exponentially. More people were working and paying taxes than ever before. This spurred massive investments in everything techie. The Dot Coms sprung up and many saw the internet as the next revolution in advanced civilization. Most didn’t realize that the investment dollars – lots of them – were the loose change falling out of the pockets of businesses that were selling everything computerized faster than they could make it.

Bill Clinton balanced the budget completely by accident. He (and Congress) were simply unable to spend the money as fast as it came in. It far exceeded even of the most optimistic of predictions.

Corporations thought the new “revolution” would continue for many years to come. The Clinton led Government set us on a trajectory to massive debt we now have, predicting huge surpluses for ever and ever. Amen.

Then January 1, 2000 rolled around and the world didn’t end. But the buying spree did! The High Tech Sector saw a complete cessation of economic activity. The Y2K binge had left everyone with brand new equipment and the normal replacement cycle that kept the money flowing to the companies was halted for several years.

Companies immediately reacted. The Dot Com revolution fizzled as investment money from massive profits dried up. Companies reorganized, “right” sized, “down” sized, and many simply closed shop.

And many believe that Y2K’s total “cost” was near zero over a longer term. Several years of future spending was compresses into 1998 and 1999. Yet the government increased spending as if this was the new norm.

And the Federal Government didn’t feel the economic pinch that the private sector did. They continued to borrow money and spend it on a Y2K economic trajectory. The Clinton Administration may have balanced the books, but they also felt obligated to try to spend the influx of cash and predicted, wrongly, that the economy would continue to grow at the Y2K induces pace.

And we never made the spending correction!

Businesses were forced to deal with reality. The Federal Government simply continued to raise the debt ceiling to make up for the shortfall since the Y2K experience died.

Clinton may have balanced the budget, but his intent was to spend all the money coming in (and more).

So for these liberals spouting off about how much success Clinton had when he increased taxes, in case you haven’t noticed, we are not exactly in a Y2K buying era. There is not one single thing Bill Clinton did that increased the Federal “revenue”. His tax increases probably slowed the boom down just a bit. But there was so much money flowing at the time, the drag on economic activity from the Clinton taxes was minimal.

But in the current economy, only a fool would point to the Y2K economy under Clinton as an example of what will happen if Obama gets his tax increases now. The drag of any tax increase will be immense in the low water economy of 2011.

We simply can’t afford Obama.

 

 

About Tom White

Tom is a US Navy Veteran, owns an Insurance Agency and is currently an IT Manager for a Virginia Distributor. He has been published in American Thinker, currently writes for the Richmond Examiner as well as Virginia Right! Blog. Tom lives in Hanover County, Va and is involved in politics at every level and is a Recovering Republican who has finally had enough of the War on Conservatives in progress with the Leadership of the GOP on a National Level.

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Tom White Says:

Nothing is more conservative than a republican wanting to get their majority back. And nothing is more liberal than a republican WITH a majority.

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