Atari is gone now, and a major reason is the video game crash of 1983. Overproduction and consumer apathy left Atari with millions of unsold cartridges, and the division caused steep losses for Time Warner Inc (NYSE:TWX). Hemmed into a corner, Time Warner Inc (NYSE:TWX) sold Atari, which faded from the video-gaming landscape just as the next generation of consoles began to emerge. Although the 2600 was soon surpassed by these newer consoles, it remained in production until 1992, which makes its 14-year production run the longest in industry history. With an estimated 30 million sales , the 2600 also ranks higher on the console sales charts than many other systems, including both the original Xbox and the GameCube.
Surplus shenanigans
There was a time, not too long ago, when the United States faced an entirely different budgetary problem, which was what to do with all the money it was taking in. On June 28, 1999 , President Bill Clinton offered a radical proposal that had not been considered for over a century: pay off the national debt. The proposal relied on some pretty incredible surplus projections, which Clinton outlined at a press conference on the White House lawn:
When I took office the national government had a record deficit of $290 billion, projected to increase indefinitely. Last year, for the first time in 29 years, we balanced the budget. In January of this year, we projected a surplus for this year of $79 billion. Today I am pleased to report that in fact the budget surplus for 1999 will be $99 billion, the largest as a share of our economy since 1951.
For next year we now project a budget surplus of $142 billion, a surplus of $5 billion, not counting the receipts from Social Security.
In fact, improvements in the outlook since February have added $179 billion to the projected budget surplus over five years, half a trillion over 10 years, and a trillion over 15 years. …
In the 12 years before I took office, reckless fiscal policies quadrupled our debt, bringing us higher interest rates, higher unemployment, higher inflation. By balancing the budget, we have begun to reduce the debt. But today, our national debt still totals $13,400 for every man, woman and child.
If we maintain our fiscal discipline, using the surplus to pay down the debt and using the savings to strengthen Social Security, America will entirely pay off the national debt by 2015.
At the end of 1999, the U.S. national debt stood at $5.6 trillion, or 61% of GDP . As Clinton had promised, the following year saw the first reduction in the national public debt (that is, debt not held in federal accounts) since 1969. However, things tend to work out a bit differently than we often expect. Rather than continuing to decline, the national debt exploded after Clinton left office. With two years left to go before Clinton’s 2015 target, the national debt now stands at $16.7 trillion, or $55,100 for every single person living in the United States , and there is no clear path back to zero.
The inability of government to pursue Clinton’s goal has more than tripled the national debt, which is now higher as a percent of GDP than it has been since just after the close of World War II . In the 14 years since Clinton projected a debt-free America, financial markets have seesawed without much long-term gain for patient investors. The Dow Jones Industrial Average 2 Minute (INDEXDJX:.DJI) has grown just 2.5% per year over those 14 years, a rate that barely keeps up with inflation . In contrast, Clinton’s tenure — during which time the national debt-to-GDP fell by six percentage points, produced one of the longest and strongest bull markets in American history.
The article The Dawn of Video Games and the Last Hope for a Debt-Free America originally appeared on Fool.com is written by Alex Planes.
Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more insight into markets, history, and technology. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple.
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