Senior admin official admits: We’re winning so it doesn’t matter to us when the shutdown ends

posted at 11:21 am on October 4, 2013 by Allahpundit

That the White House feels this way is a “secret” the way Israel’s nukes are a “secret.” The reality is clear to everyone, but no good can come from formal acknowledgment.

Says Sam Stein of HuffPo, “Obviously, polling data would support this contention and certainly, from the conversations I’ve had with senior administration officials, the White House feels that it has the upper hand. But to say you don’t care how long the shutdown lasts is to suggest that the impact it’s having throughout the country isn’t factoring into your strategic thinking.”

Why, yes. It does suggest that, doesn’t it?

Terry Holt, a longtime Republican strategist, said Mr. Obama’s strategy rests on a cold-eyed calculation that Republicans are the ones with the most to lose. “As long as the president thinks his poll numbers are going to be good, I don’t expect the government to reopen,” he said.

Said a senior administration official: “We are winning…It doesn’t really matter to us” how long the shutdown lasts “because what matters is the end result.”

The corollary to that, of course, is that the more the public suffers from the government being closed, the more the White House “wins.” That’s the essence of shutdown theater. Crazy theory: Maybe the reason the White House isn’t factoring public hardship into its strategic thinking is because, for all its blather, it doesn’t believe that there is much hardship. Furloughed workers will get back pay; people who can’t visit national parks are inconvenienced, but not so much so that Democrats will give up their opportunity to “win” politically because of it. And what about the cases of real, life-or-death hardship that need to be addressed urgently? You already got your answer on that.

To give you a sense of just how “secret” this is, via the Corner, here’s GOP Rep. Devin Nunes telling Jake Tapper that House Dems have been crowing openly about shutdown fee-vah in conversation with other members. Exit quotation from Tapper himself, who’s fed up with the talk of political victories from both the unnamed official in the Journal piece and from Rand Paul: “There’s a definition of ‘winning’ being used in DC that recalls that of Charlie Sheen.”

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Going to the Source: Monthly Treasury Statements

In order to analyze what happened in fiscal year 2000 (the year with the claimed $236 billion surplus) we need to refer to the MTS for September 2000. The government’s fiscal year runs from October of the previous year to September of the year in question–so Clinton’s fiscal year 2000 went from October 1, 1999 to September 30, 2000. By looking at the monthly report for September 2000 we’re looking at the summary for the last month of the fiscal year; thus all the “year-to-date” totals in this report reflect the totals for fiscal year 2000.

Right away we can find references to the claimed $236 billion surplus: In table 1 on page 2 we can see the $236,993 surplus on the “year-to-date” surplus value at the bottom of the table.

Yes you can also see it as under accrual accounting, where the annual Treasury reports show surpluses of $69.2 billion in fiscal 1998, $76.9 billion in fiscal 1999, and $46 billion for fiscal year 2000. Whith accrual accounting the costs of promises made to pay future benefits to government workers and Social Security and Medicare beneficiaries are taken out of the Federal revenue.

You will see that this will be a problem for him later and will show why no one uses his GROSS accounting method.

How the National Debt Is Calculated

The national debt obviously isn’t calculated the same way we would think. 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. This is the difference that must be explained.

When the Federal Government has a surplus it spreads that surplus into the trust funds/intragovernmental accounts so that it can continue to issue the bonds as is required by LAW!

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.

BS! That is not how calculate the NET budget! Only the public debt is what we, you, me our children owe. It is the total NET calculation of all combined years of unpaid government expenditures in REAL MONEY. Public debt is NET debt owed but intergovernmental accounts plus the public debt is GROSS debt owed because its NOT calculating REAL MONEY.

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

No! That is called total Gross debt. Why is it considered Gross debt and not NET debt. Because the intergovernmental accounts = bonds that MUST be issued as is required BY LA but it is not REAL MONEY.

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.

Or when you have a federal surplus you take that money and add it to Social Security which will appear as a loan because the government is required by law to issue bonds. But its only a loan in book keeping sense and does not change the actual NET budget = REAL MONEY in your wallet.

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. 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.

I hope your seeing his flaw here and recognize what he is doing. THE BUDGET SURPLUSES had become so large that the Department of the Treasury instituted a debt buyback program. So the government started buying back from Social Security and other intergovernmental accounts in order to still be able to issue the bonds as is required by law. But the yields on treasuries dropped to the point you had to pay to instead of GETTING PAID for buying treasuries. This was causing the liquidity of the Treasury market to deteriorate significantly because you couldn’t make money from them since they were not a loan as there was a surplus.

Whenever a trust fund has a surplus intragovernmental debt will increase because the surplus money is automatically loaned to the federal government’s general fund. That money is then used by the federal government for its normal operations. The fact that a trust fund has a surplus simply means the federal government doesn’t need to borrow as much money directly from the public since it’s receiving extra money from the trust funds. It’s still borrowing money–just from a trust fund rather than the public.

That is what I have been saying all along!!!!!! Remember public debt is what we actually owe! NET debt = total public debt. GROSS debt = intergovernmental accounts plus public debt but we don’t owe any money to intergovernmental accounts as they are a book keeping record for which bonds must be issued despite if there is a deficit or a surplus.

If the combined surplus from general taxes plus the total surplus of trust funds actually results in a surplus, that means the government received more money than it needs that year. In that case it will pay down the public debt–even if intragovernmental debt has increased. That’s what happened in 2000. The combined total of taxes and trust fund surpluses exceeded the amount of money the government needed that year, and some of the extra amount was used to pay down the public debt.

The REPUBLICAN Joint Economic Committee August 2001 Report, (emphasis mine), says:

THE FEDERAL DEBT REDUCTION is causing the primary market to shrink.

THE BUDGET SURPLUSES had become so large that the Department of the Treasury instituted a debt buyback program during 2000.

As federal net debt is RETIRED, the supply of Treasuries is becoming sufficiently scarce to have serious consequences in financial markets.

THE FEDERAL DEBT REDUCTION is causing the liquidity of the Treasury market to deteriorate significantly.

THE FEDERAL DEBT REDUCTION is disturbing the historical relationships between the yields on Treasuries and the yield on other securities that made Treasuries useful as a pricing benchmark and a regulatory tool.

THE FEDERAL DEBT REDUCTION is not only reducing liquidity but is also eroding the integration of the Treasury market.

Another example how THE FEDERAL DEBT REDUCTION is contributing to a breakdown of historic relationships in financial markets is seen in Graph 13.

THE FEDERAL DEBT REDUCTION has made Treasuries more expensive to use in repo transactions.

These changes induced by THE FEDERAL DEBT REDUCTION raise concerns among market participants.

During this decade, large recurring FEDERAL BUDGET SURPLUSES and the resulting reduction in federal net debt will likely transform global financial markets.

The probability of SUBSTANTIAL CONTINUING SURPLUSES is sufficiently high to require that, at a minimum, we begin to address their potential implications for fiscal policy decision makers, financial markets, and the Federal Reserve.


JustTheFacts on October 5, 2013 at 6:53 PM

Today, the House UNANIMOUSLY voted to give back pay to furloughed Federal workers. The Senate was supposed to vote on the bill this afternoon, but then Harry Reid shut that whole thing down and adjourned the Senate.

Resist We Much on October 5, 2013 at 7:17 PM

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 Government did not barrow money from a friend or anyone else!

An article at Factcheck is often used to respond to my original article. The article cites Congressional Budget Office (CBO) numbers that cite an on-budget surplus of $87.2 billion and an off-budget (Social Security) surplus of $149.8 billion. The Factcheck article says: “But even if we remove Social Security from the equation, there was a surplus of $1.9 billion in fiscal 1999 and $86.4 billion in fiscal 2000.”

Clinton’s “Social Security surplus” of $149.8 billion would make the total deficit or surplus figures look BETTER than it would if the Social Security of $149.8 billion isn’t counted!

The above Factcheck statement acknowledges the fact that Social Security trust fund surpluses really don’t have anything to do with the president’s budget, nor can they really be considered part of a surplus since they’ll have to be paid back to Social Security later.

You can take Clinton’s budget and subtract not just the current, (which is normal), but ALSO the FUTURE benefits to government workers and Social Security and Medicare beneficiaries out of the Federal revenue and show surpluses of $69.2 billion in fiscal 1998, $76.9 billion in fiscal 1999, and $46 billion for fiscal year 2000.

So they argue that even if you don’t count the $149.8 billion Social Security surplus, President Clinton was still responsible for an “on-budget” surplus of $86.4 billion (actually the numbers are $87.2 billion on-budget and $149.8 billion off-budget/Social Security according to to table 2 of the MTS ; I’m not sure where Factcheck got its numbers… but their numbers are close enough).

If we count the “Social Security surplus” of $149.8 billion it makes the total deficit or surplus figures look BETTER! He admits that in this one year alone Social Security brought in MORE than its current expenditures for that year by $149.8 billion.

What Factcheck does not mention, however, is that while Social Security is the only off-budget trust fund, it’s not the only trust fund. Just as surpluses caused by Social Security should not be considered a real surplus caused by a president’s budget, nor should surpluses caused by other trust funds be considered.

Yea because if we took all the surpluses it it makes the total deficit or surplus figures look even BETTER! But the SURPLUS is so big that we can simply ignore the Social Security surplus of $149.8 billion for that year and we can even ignore the others. We can even pay in ADVANCE for FUTURE benefits to government workers and Social Security and Medicare beneficiaries out of that years Federal revenue and show surpluses of $69.2 billion in fiscal 1998, $76.9 billion in fiscal 1999, and $46 billion for fiscal year 2000.

As can be seen from Table 6 Schedule D of the Treasury Department’s MTS , all the government’s trust funds contributed a total of $246.5 billion to the “surplus.”

NO IT DIDN’T Only Publicly issued Treasuries represent legally binding commitments = MONEY BORROWED. In contrast, the U.S. government is both the creditor and the debtor for Treasuries held in intragovernmental accounts = book keeping.

As of March 31, 2001, the U.S. government had a GROSS debt of $5.8 trillion, of which $3.4 trillion or 59.5 percent was net debt held by the public. The public debt is what we all owe.

$2.3 trillion or 40.5 percent was held in intergovernmental accounts. The public does not owe any money to intergovernmental accounts as that is nothing more than book keeping because the government is BOTH the creditor and the debtor for Treasuries held in intragovernmental accounts.

Economists consider net debt as the proper measure of federal debt because increasing (or decreasing) net debt represents a withdrawal of money from (or a release of money to) the government itself as both the lender and the creditor.

But Publicly issued Treasuries represent legally binding commitments with other parties that cannot be abrogated. In contrast, the U.S. government is both the creditor and the debtor for Treasuries held in intragovernmental accounts.


JustTheFacts on October 5, 2013 at 8:05 PM

My goodness.

Bmore on October 5, 2013 at 9:12 PM

Here is the “SUMMARY OF RECEIPTS, OUTLAYS, AND SURPLUSES OR DEFICITS from 1789–2013: read page 26!

And here is a CBO graph that shows “Historical Trends in Revenue and Outlays as percent GDP”:


JustTheFacts on October 5, 2013 at 9:23 PM

It is easy to see how the feeble minded wouldn’t understand the FACTS.

Back in 2010, when I had my own blog – and the disaster of what would become the Obama presidency was still largely ahead of us – I was commenting on an article from Reuters (of all places) that predicted a national debt of nearly 20 trillion bucks by the year 2015.

Prophetic, yes, if not a little too conservative in estimate.

As I wrote then:
An exasperated blogger at Reuters, who goes by the name of johnchick, posted the following rhetorical question: “How can any Administration raise the debt by 20-30% in a couple years?”

To which another blogger responded with the following:
“You should ask George Bush, Cause he was the first to do it. And he is largely the origin of the current fiscal mess that the U.S. is in. Bushie inherited a surplus from the Clinton Administration and quickly turned that into the largest yearly deficits that the U.S. has ever seen. And his Conservative ideology ruined the American Economy in the process. The U.S. is now going the way of the DoDo. And the world will be a better place for it.”

At the time, a million questions and comments came to mind: Bush a conservative? Really? The world would be a better place with a failing United States economy? Bush inherited a surplus? Huh?

The focus of my article then went on to dispel that myth – and that’s EXACTLY what it is: a bona fide piece of fiction.

Here’s what I wrote then:

Let’s be perfectly clear, there was never a true surplus under President Bill Clinton.

Indeed, it flies in the face of conventional wisdom, but the numbers do not, in any way, back up such a claim.

For example, the surplus announced in 2000 – $230 billion – was really a nifty bookkeeping stunt. It was not a genuine surplus, because only the “public debt” was accounted for.

Remember, there are two components to the national debt: public debt – which includes such things as savings bonds and treasury bills – and intergovernmental holdings, which includes income tax revenues and governmental borrowing from itself.

During the last years of the Clinton administration, the public debt did go down, but intergovernmental debt increased by a greater amount.

Not once during Clinton’s time in office did the national debt decrease.

It is not possible, by definition, to have a surplus if the national debt keeps increasing.

First of all, the official Clinton “surplus” numbers, which can be seen here, via the Congressional Budget Office, are as follows:

-Fiscal Year 1998 – $69.3 Billion surplus.
-Fiscal Year 1999 – $125.6 Billion surplus.
-Fiscal Year 2000 – $236.3 Billion surplus.

Please note that these very numbers were also reported by CNN.

Now, if you go to the Bureau of the Public Debt website, which is part of the United States Department of Treasury, you’ll find a link that reads “See the U.S. Public Debt To The Penny.” (You may need to scroll down a bit)

Once you click on that, you’ll be brought to page that gives you the current total national debt (divided into two subgroups: “Debt held by the Public” and “Intrgovernmental Holdings”) along with a search application that enables you to type in the dates of your choosing to see what the total national debt was on that given date.

The important thing to check are the FISCAL YEAR parameters. (The fiscal year always begins on October 1st and runs through the end of the following September).

For instance, if you type in “October 1, 1999″ in the first box and “September 30, 2000″ in the next box, you will be asking to see the total national debt figures for Fiscal Year 2000. You’ll note, after typing in those parameters, that if you scroll all the way to the bottom, the total debt held by the public at the end of Fiscal Year 2000 was “$3,405,303,490,221.20.” You’ll also notice that Intragovernmental Holdings total was “$2,268,874,719,665.66.”

These are official Department of Treasury numbers.

Adding those two numbers together gives you a grand total of “$5,674,178,209,886.86.”

That is what the total national debt was at the end of FISCAL YEAR 2000. The National Debt is thus calculated by adding the Public Debt and Intragovernmental Holdings together.

Compare the total public debt of FY2000 to that of FY1999.

President Clinton did technically pay down the PUBLIC NATIONAL DEBT from FY1999 to FY2000.

FY1999 PUBLIC DEBT: $3,636,104,594,501.81

FY2000 PUBLIC DEBT: $3,405,303,490,221.20

It was paid down by a total of $230,801,104,280.61 – amazingly close to the announced $236 Billion surplus for that year. But it was done so by borrowing from the Social Security Trust Fund (primarily) which ran a surplus that year. The Social Security Administration is required by law to buy government securities with its surpluses (convenient, isn’t it?). That money was thus used by the government to do its business without having to get it from the public. Hence, the public debt was “paid down.”

I fully concede the point that President Clinton paid down the PUBLIC debt, but not the national debt.

Unfortunately, that $230 Billion “pay down” does not take into account Intragovernmental Holdings, which is as much part of calculating surpluses and debts as the Public Debt is.

Intragovernmental Debt ROSE in FY2000.

FY1999: $2,020,166,307,131.62

FY2000: $2,268,874,719,665.66

That’s an increase of $248,708,412,534.04

The difference between how much of the public debt was paid down compared to the growth of the Intragovernmental debt was: – $17,907,308,253.43

That means FY2000 resulted in a true deficit of almost $18 Billion under Bill Clinton.

Those pesky facts.

Murphy9 on October 5, 2013 at 10:23 PM

That poor chicken, it must feel like the women of Arkansas when Bill Clinton, the impeached, disbarred, serial rapist, adulterous, liar, fined POS, was there having his way while his lesbian wife of political convenience was trying to put out all the fires.

Too many laughs JTF, you fking moron!

Murphy9 on October 5, 2013 at 10:25 PM

By “feeble minded” I meant JustTheFacts, of course.

Murphy9 on October 5, 2013 at 10:26 PM

How much would it suck, existentially, to be wedded to lying about petty shit like this for 500+ comments to prop up a morally and intellectually bankrupt political party?

I mean, you blew any slight modicum(nonpartisan) of credibility you had ages ago.


Final transmission to the godless reprobate whom I hope experiences the most pain under obamacare. It really couldn’t happen to a worse human being…besides the dog eater…of course.

Murphy9 on October 5, 2013 at 10:30 PM

Here is the “SUMMARY OF RECEIPTS, OUTLAYS, AND SURPLUSES OR DEFICITS from 1789–2013: read page 26!

And here is a CBO graph that shows “Historical Trends in Revenue and Outlays as percent GDP”:


JustTheFacts on October 5, 2013 at 9:23 PM

CBO: Debt Bush vs Obama

Not. even. close.

Chuck Schick on October 5, 2013 at 10:54 PM

So if you have a C corporation or if you have any corporation whose annual gross recites are over $5 million or a corporation engaged in farming operations where you are required by LAW to use the accrual method of accounting and NOT THE CASH METHOD OF ACCOUNTING you are going to calculate what you owe in taxes by using BOTH methods and ADDING THEM TOGETHER!?!?


Or are you going to use both the accrual method and the cash method so as to increase your tax write-offs in order to cheat the government out of what you actually owe in taxes?!?!?

Have fun in FEDERAL PRISON TAX CHEAT’s!!!!!!

JustTheFacts on October 6, 2013 at 2:47 AM

Have fun in FEDERAL PRISON TAX CHEAT’s!!!!!!

JustTheFacts on October 6, 2013 at 2:47 AM

Annnnnnnnnd scene. Meltdown was imminent.

Out of all the Obama cultists bizarre antics, the “Obama is a fiscal conservative” is the most hilarious, and so easy to disprove.

Chuck Schick on October 6, 2013 at 11:29 AM

Well, I looked through every word of it. No idea why its not working. Too many quoted comments at once? Perhaps some other time. ; )

Bmore on October 6, 2013 at 7:59 PM

, I’ll go with the comma rather than the, “TO BE CONTINUED:”

Bmore on October 6, 2013 at 8:00 PM

60 trillion dimes since he took office.

Bmore on October 10, 2013 at 8:34 AM

Lmfao JTF you fvcking leftist moron. Hope you are ready to spend an eternity in hell. its what you want and God is gracious enough to let you have what you want.

Murphy9 on October 10, 2013 at 1:47 PM

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