Facts

We hear about the deficit all the time - but how bad is it and what, for that matter, is a deficit? Some basics...

Definitions

Deficit – the deficit is how much more the federal government spends in a given year than it raises in revenue (through taxes, mostly) (Note: we're just talking about the budget deficit here; for info on the trade deficit, see our trade page)

Surplus – a surplus is how much more the federal government raises in a given year than it spends (the opposite of a deficit – happens rarely)

Debt – the total accumulation of past deficits – or, how much we owe. There are two kinds of debt that people talk about:

Issue in Brief

What’s up?

The Skinny

see also background & facts, pro & con, links

What's up

Debt. We’re deep in it – and still digging. Some economists warn that our national debt is growing to dangerous levels and could end up hurting our economy in the short- and long-term. Others caution there’s no need for alarm; the debt is manageable and is even a necessary byproduct of policies designed to boost the economy in sluggish times.

Issue in Brief

With the federal government running deficits for four years in a row, fiscal conservatives on the left and right occasionally push for stricter rules and checks to keep spending under control.

While 2006's Congress was gunning for a line-item veto and talked about setting up sunset rules and an efficiency panel, the 2007 Congress is on its way to pass pay/go rules. More on what all those reforms are about: