Party Like It's 2000

If you listen to conservatives bray about the economy one would think that we are approaching Clinton era economic prosperity. Instead, more than five years after taking over the White House, a few economic indicators are approaching levels last seen in 2000.

Last week the Dow Jones Industrial average reached a high of 11,640 and the Treasury Department announced that the difference between revenue and expenses in April was $118.9 billion, leading conservatives to complain that Bush is not getting credit for the current economic situation.

Yet any in-depth look at the complaints show that at best the economy is producing some numbers similar to the end of the Clinton-Gore era. The Dow Jones hit its all-time high of 11,723 January 14, 2000, nearly 100 points above the recent high.

While it is easy to look at the Dow figures, the surplus number are harder to examine and so the latest conservative "complaint" is that the media is underreporting the April budget surplus numbers issued by the Treasury. Yet a number of media outlets took the Treasury numbers hook, line and sinker and proclaimed that at $118.9 billion the government had a huge surplus.

However in 2001 the Government had a surplus of $189 billion so the $118.9, while encouraging, is nothing to write home about. (See chart for comparison of April surplus to overall annual revenue, compared to the increase in the national debt.)

Also in 2000, before Bush could this program of tax cuts and spending spree, the national debt increased by only $18 billion. So far this year the debt has increased $427 billion with five months to go. With the best tax collection month in the books, is a $700 billion increase in the national debt possible?

(Yes, the media says the deficit is only up $184 billion so far this year and may come in under $350 billion, but since conservatives always complained during the surplus years of the Clinton administration that one should really look at the increase in the national debt, surely they would want us to do the same now. (And for an even more bizarre view, see the views of Treasury Secretary John Snow.)

When someone mentions the increase in gas, conservatives are always quick to point out that according to inflation it has not increased that much, if at all. So how come no one wants to adjust the April surplus numbers? Perhaps it wouldn't make Bush look that good?

The only reason the April surplus numbers look as good as they do is that federal revenue has been down in recent years so comparing the April surplus to Annual revenue, the $118 billion surplus represents a larger percentage than if federal revenue had been increasing over the past few years.

So are we back to Clinton era prosperity? No, only by borrowing heavily and mortgaging the future are we getting decent economic numbers, as opposed to responsible economic policy setting the stage for long term progress.