“We’re not going to go back to the policies that took Bill Clinton’s surplus and in eight years turned it into record deficits,” said Barack Obama, providing an incomplete and politically biased explanation of United States economic history to a recent gathering of union leaders.1
Leading the United States to a “peace dividend” when the Berlin Wall fell in 1989, President George H.W. Bush initiated a fiscal policy that effectively lasted until the terrorist attacks of September 11, 2001, using savings from discretionary funds previously appropriated for the Cold War military budget to reduce the national debt. The Democratic leadership wanted to spend the peace dividend but instead had to follow Bush’s fiscal leadership to balance the federal budget through implementation of the Bush-inspired “Contract with America.” 2
1. Barack Obama, “Remarks by the President to the AFL-CIO Executive Council,” The White House, http://www.whitehouse.gov/the-press-office/remarks-president-afl-cio-executive-council.
2. “A Precious Moment,” The New York Times, December 10, 1989, A22. “House Votes Down a Plan to Use ‘Peace Dividend’.” The Wall Street Journal, April 1, 1992, A18. Roger B. Porter, “George Bush, Father of the ‘Contract’. ” The Wall Street Journal, December 13, 1994, A18.