Political Crossfire Forums

[RueTheDay]

Brooklyn wrote: After much thought, (and a little research) I am puzzled. During the last 2 years of the Clinton Administration, the U.S. had a budget surplus and a current account deficit.

Am I missing something here?

Yes, you're missing the rest of the equation.

Take a look at what happened to the national savings rate over that period:



It went from over 8% in 1995 to under 2% in 2000.

[RueTheDay]

LeopardPM wrote: Brooklyn wrote: After much thought, (and a little research) I am puzzled. During the last 2 years of the Clinton Administration, the U.S. had a budget surplus and a current account deficit.

Am I missing something here?
apples and oranges

My personal budget is always surplus, yet my current account is always deficit (if you exclude my own sale of my labor, which National Current Accounts don't factor in)

Huh? That makes no sense. You may have the equivalent of a balance of payments deficit with stores that you purchase goods and services from, but you have an equivalent balance of payments surplus with your employer.

[RueTheDay]

Gus wrote: TheKrava wrote: You know.... Personally I have a huge trade deficit with my local Target store....... I buy stuff from Target................................ But............ Target never buys anything from me!!!!!!!!!!!!!! I"m going to dye from hunger!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

I think that's a good comparison, and one that probably should be addressed by the original poster...

Actually, it's a pretty crappy comparision. We're talking about the nation's overall trade balance; extending your example to a country would be like talking about one nation's unilateral trade balance with another nation (e.g., the US balance of payments with China) rather than the total US balance of payments.

[Gaea]

RueTheDay wrote: Brooklyn wrote: After much thought, (and a little research) I am puzzled. During the last 2 years of the Clinton Administration, the U.S. had a budget surplus and a current account deficit.

Am I missing something here?

Yes, you're missing the rest of the equation.

Take a look at what happened to the national savings rate over that period:



It went from over 8% in 1995 to under 2% in 2000.

The chart says Personal Savings, not National Savings.

[RueTheDay]

Moot wrote: RueTheDay wrote: Brooklyn wrote: After much thought, (and a little research) I am puzzled. During the last 2 years of the Clinton Administration, the U.S. had a budget surplus and a current account deficit.

Am I missing something here?

Yes, you're missing the rest of the equation.

Take a look at what happened to the national savings rate over that period:



It went from over 8% in 1995 to under 2% in 2000.

The chart says Personal Savings, not National Savings.

Private sector savings = business savings + personal savings. The business savings rate showed a similar downtrend over the same time period.

[Gus]

RueTheDay wrote: Gus wrote: TheKrava wrote: You know.... Personally I have a huge trade deficit with my local Target store....... I buy stuff from Target................................ But............ Target never buys anything from me!!!!!!!!!!!!!! I"m going to dye from hunger!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

I think that's a good comparison, and one that probably should be addressed by the original poster...

Actually, it's a pretty crappy comparision. We're talking about the nation's overall trade balance; extending your example to a country would be like talking about one nation's unilateral trade balance with another nation (e.g., the US balance of payments with China) rather than the total US balance of payments.
Yeah good point. I suppose I can let you be right at least occasionally ;).