Those were relatively good times...
Poor George, Sr. looks stunned dumb as he listens to Clinton's response. Truth unfolds in time through a communal process.
All subjects and rules are controlled by the bipartisan (rather than non-partisan), corporately sponsored Comission on Presidential Debates. The rules evolved to stifle any real discussion, and minimize surprises. For example, now candidates cannot address an opponent (while Clinton and Gore could 15 years ago). Audience questions are selected watchfully.
In 2004, there was much less chance for junior Bush to dissemble on a similar question. (Although he was quite dissembling in the first debate nevertheless.) Bill Clinton was rather lucky then... or people are rather tricked now...
Bush Sr. couldn't figure out a way to answer, at first, because the question simply didn't make sense (which is why the moderator had to say "I think she means the state of the economy"). Clinton had a whole minute to figure out how to re-direct the question.
Smart man.
Poppy Bush, of course, had no answer, because it didn't affect him in any way.
I disagree about the question not making sense. The question made perfect sense: "How does the deficit affect you personally?" My answer would be, "Well, the deficit will inevitably drive up interest rates as it feeds inflation. The inflation causes erosion in my salary and will make borrowing (for a house, a car, servicing a credit card) more difficult for me and others. And since it hurts the abilities of others in similar ways, it can put even more pressure on me through spillovers."
I thought it was a fantastic question. It's sad that most politicians, even great ones like Clinton, can't provide full answers it. WHEEEEEEEEEEEEEEEEEEEEE!
Interest rates tend to (and I do mean tend) indicate expectations of future inflation, both short-term and long-term, which budget deficits, at least the structural part of them, also tend to fuel. And tighter credit in a strictly neo-liberal system with no protections, no indexing and so forth hurts working people. So in that sense a deficit can hurt working people, via inflation or tight credit, assuming nothing is done to offset their effects.
But the thing is, in '92, interest rates were no higher than in 2000, US 10-year yields, which correlate well to mortgage rates, are virtually identical in comparison, so it cannot be said that markets were punishing credit because of a large US budget deficit, much of which back then wasn't, strictly speaking, structural (but was rather because Poppy and the Democratic Congress were busy bailing out their S&L buddies). The questioner clearly was worried about something at best only speciously related to the budget deficit.
The reason it was in the US consciousness at the time was because a third right-wing candidate, not pictured in this debate clip, who used millions of his money to make it an issue.
I disagree that the deficit will inevitably drive up interest rates. It depends on what the deficit is for. If it is to kick start an economy and fuel the sorts of economic outcomes which either reduce further outlays or increase future revenues, a deficit does certainly no such thing.
Yes, that's certainly true. If deficits are run, for example, too boost the country's infrastructure, or for some other purpose that can lead to stronger productivity growth, it may well be the case that inflationary pressures are reduced.
I do agree that the questioner was likely worried about something not heavily tied to the deficit. She was worried about jobs and the economy in general, and was operating on the (admittedly Democratic) fairy tale of it being all about the budget deficit. WHEEEEEEEEEEEEEEEEEEEEE!
