I watched a clip of Bill O’Reilly debating Jon Stewart and was surprised to hear Jon Stewart make the mistake that I wrote about in my blog, “What Liberals Don’t Understand About The Nation’s Economy.” He mistakenly assumed that balancing the budget was the same as paying off the national debt. He thought President Clinton left the nation debt free when he left the White House which was not the case. Clinton, like all presidents before him, added to the nation’s debt.
Ask any liberal to explain the difference and define the terms balance the budget, deficit and surplus. You will get an angry person because he or she doesn’t have the slightest understanding of what the terms mean. You can help a liberal to understand by using credit cards as an example.
Ask them what happens when they use a credit card to make purchases. They acquire debt. Then explain that a credit card is a bank loan. Of course, the price for granting them the loan is to charge them an interest rate. The standard business practice is that the person using the credit card must first pay the interest before paying off the debt.
If a person only pays the minimum balance each month and still spends money, the debt will continue to increase and the interest will rise as the debt grows larger. The card holder is going deeper into debt. Common sense!
If a person spends as much as he/she receives in salary by paying all of the minimum balances without increasing spending and their debt, he/she balanced his/her budget. But the debt still exists and must be paid off. Balancing the budget merely means the person can pay his/her bills.
If a person continues to spend money beyond what he/she earns by using the credit card, the person is involved in deficit spending. In simple terms, a deficit means spending more than you earn. The debt grows through deficit spending and credit cards are sources for deficit spending.
Now if a person earns more money than he/she spends, then he/she has extra money or a surplus. A wise person will use the extra money to pay bills, pay down the credit card interest and pay off as much of his/her credit card debt. (Advocated by Suze Orman.) But people and governments tend to spend the extra money and not pay down their debt until they face bankruptcy.
Jon Stewart thought that since Bill Clinton balanced the budget and had surpluses for a few years, there was no debt. There was a national debt accumulated when Clinton took office and he left a national debt to George H. W. Bush when he left office. Stewart confused balancing the budget and surpluses with no national debt. It was a major gaffe by Jon Stewart and demonstrated he didn’t understand the economics of the nation.
It is not rocket science Jon Stewart! Obama has freely spent trillions of dollars like a person who has no credit card limit. Every year of his administration he has spent more than the government collects in taxes (deficit spending) which has driven the nation into a $16 trillion economic hole (national debt). He has borrowed from China (more debt and interest) so he can continue his spending spree. Like a credit card debt, our national debt can create a fiscal crisis where either vital programs are cut or we face bankruptcy like Greece. Why don’t liberals get it?