I need to be educated on federal deficit/national debt . . .

[CrispyQ]

...are they the same thing?

I just finished reading “The Pickpocket” by Bridget Gibson (homepage of DU). Great article, btw, even if I don't understand the following part. The article states:

"In 2000, George Bush said that tax cuts would do the trick to make a fairly healthy economy even better. The anticipated federal deficit for 2004 was released yesterday at $445 billion. Since taking office, the national debt has skyrocketed to more than $7.3 trillion - more than $1.6 trillion have been added on Bush's watch - with the debt ceiling being raised three times!"

..
..
Ok, so my question. I thought we had a surplus when Bush stole office, but her statement says that $1.6 trillion has been added on Bush’s watch. I don’t get it. If the debt is $7.3 trillion & we had a surplus, wouldn’t the amount added while Bush is in office be $7.3 + whatever the surplus was?

Also, what is the current deficit/debt?

Forgive my ignorance!

[RobertSeattle]

1. The Concord Coalition is pretty well respected for unbiased info

http://www.concordcoalition.org/

[bobbyboucher]

2. Deficit is annual, debt is cumulative.

We had a debt of $5+ trillion before Chimpy arrived through the back door. The deficits have added to that each of the years he's been in.

Yet, they don't total to the amount that has been borrowed. That I do not understand.

[Jacobin]

3. Here's a shot at it

The budget deficit is the amount by which federal spending exceeds tax revenues taken in in a fiscal year. For instance, this year, the budget deficit will be about $500 billion dollars. Smirky spent $500 billion more than federal taxes collected.

The national debt is the cumulation of the deficits over the years. I think its about $7 trillion, of which we can thank Raygun for three trillion.

Clinton left office with two surpluses in a row

[noahmijo]

4. Someone with more experience correct me if I am wrong

The 7.3 is including the surplus. It's like when you take a negative number and add it to a positive number.

So by the numbers you flashed really the debt would be closer to 8.9 trillion, but since we had a surplus of 1.6 it brings it to 7.3


Our current debt:

http://www.brillig.com:80/debt_clock/debtc.gif

http://www.brillig.com:80/debt_clock/

[Az_lefty]

5. Bush added 700+ billion to the National Debt.

the deficit is what we over spend year to year. Clinton ran a surplus
budget, so Bush added 700 billion plus wiped out the surplus.

[bobbyboucher]

9. Help me with this,

it was reported yesterday that the debt limit needs to be raised, because we have borrowed up to the legal limit. The limit is now $7.4 Trillion. They had to raise it in February of 2003 to that 7.4 figure from $6.4 trillion. In June 2002, it was raised to 6.4 from 5.95, adding room for another $450 billion in borrowing.

So, my point, we keep borrowing up to the limit, which would total right about $1.45 trillion in borrowing since June of 2002. How is it that Chimpy has only added $700 billion, yet we have borrowed $1.45 trillion, more than double that, and then some?

[Eric J in MN]

6. We had a budget surplus (yearly surplus) but still

massive debt, largely from the Reagan years, when Clinton left office.

[xray s]

7. here is one way to think of it

The national debt is the cumulative amount the government has borrowed because it spent more than it took in in taxes. In 2000 it was 5.7 trillion. Today it is 7.3 trillion because Bush has been spending more while cutting taxes, mostly benefitting the richest 1% in our country.

The deficit refers to the difference between spending and revenue in a particular year. So, if we spend $455 billion more than we take in, the deficit is $455 billion and the national debt goes up $455 billion that year.

Clinton was running surpluses, that were reducing the national debt.

Think of the national debt as a mortgage, and the deficit as if you spent all your paycheck and then went out and borrowed more against your house to cover the shortfall.

[King of New Orleans]

8. From the Bureau of Public Debt

1.2) What is the difference between the debt and the deficit?

The deficit is the fiscal year difference between what the Government takes in from taxes and other revenues, called receipts, and the amount of money the Government spends, called outlays. The items included in the deficit are considered either on-budget or off-budget. (The off-budget items are typically comprised of the two Social Security trust funds, old-age and survivors insurance and disability insurance, and the Postal-Service fund.) Generally, on-budget outlays tend to exceed on-budget receipts, while off-budget receipts tend to exceed off-budget outlays.

You can think of the total debt as accumulated deficits plus accumulated off-budget surpluses. The on-budget deficits require the Treasury to borrow money to raise cash needed to keep the Government operating. We borrow the money by selling Treasury securities like T-bills, notes, bonds and savings bonds to the public. Additionally, the Government Trust Funds are required by law to invest accumulated surpluses in Treasury securities. The Treasury securities issued to the public and to the Government Trust Funds (Intragovernmental Holdings) then become part of the total debt. For information concerning the deficit, visit the Financial Management Service website to view the Monthly Statement of Receipts and Outlays of the United States Government.


This year, the deficit will be around $450 billion. The national debt this year will increase roughly $610-620 billion. Social Security will generate about a $160 billion dollar surplus this year, Ever since the Social Security Reform Act of 1983 when Social Security taxes were raised, Social Security has been building a surplus. That surplus is there to enable the system the deal with the wave of baby boomers that start retiring in about 8 years from now. However, the SS surplus is counted against the rest of the budget, which will run about $610 billion in the red.

Actually, a very good economic argument can be made for running a modest deficit especially in recession years, but the deficits Bush is running ain't modest.

[leftyandproud]

10. We NEVER has a surplus..

not even close

The debt grew by $2 trillion during Clinton's term.

We are NEVER going to get out of this, no matter who is president.

[muriel_volestrangler]

12. If you measure national debt as a percentage of GDP

which is a reasonable thing to do - the GDP being an indication of how much you have to service the debt - then only 3 post war presidents have increased the national debt over their term: Reagan, Bush Sr, and Bush Jr.

See the graph at http://zfacts.com/p/318.html

[BillZBubb]

18. YOU ARE WRONG.

You are either intentionally misleading, or don't know the facts. I hope it's the latter.

Using the accepted budget methodology (which all administrations must use), Clinton was generating budget surplusses. That is a fact. If you need it, I can provide you a link to the historical US budget data.

Now, you can argue that "off budget" items and liabilities aren't counted in the budget, but that's and entirely different discussion. By the accepted rules, Clinton was generating surplusses. PERIOD.

[Inland]

11. LIke he said

Each fiscal year either has a deficit or surplus.

The national debt is a TOTAL of all the outcomes over all the years.

So Bush's deficit of some $450 Billion or whatever it is this year gets added to the debt.

Now the fact is, we don't have to repay the debt itself.

However, we do have to pay interest on the debt. Interest is the third largest item of spending, after only military and social security payments. Its one reason why we don't have any money for things we would like to do. Thanks, Republicans, for tripling our debt since Reagan took office.

And large deficits may have adverse economic consequences, but that's too complicated for here and depends on many factors.

[fob]

19. Please elaborate on this statement...

Now the fact is, we don't have to repay the debt itself

Isn't that debt held by many hands, including foreign governments, China, Japan, etc. They buy bonds, etc and could most assuredly present their holdings and demand payment, right?

[muriel_volestrangler]

21. Most government debt has an expiry date

at which they must repay the principal. Most governments will issue new bonds at that time, so they continue to owe money to someone. If the government is still trusted, the interest rate will be small - if investors get uneasy, the government will have to offer more interest to make them take the risk that the government will default in the future. If a government defaults, they'll have a much harder time of issuing bonds again.

I know the US and UK governments have never defaulted on a debt; the same probably applies to Switzerland, Canada, Australia and New Zealand. I don't know how many others can say that - getting invaded in a war doesn't do wonders for your ability to repay debts.

[fob]

22. So what you're saying is that by "we don't have to repay the debt"

that "have" means we could if we wanted to and had the means NOT that it just goes away into nothingness. I just wanted clarification of that oversimplified statement.

[snippy]

13. There are two components of the national debt.

One is the publicly held debt and the other is the trust fund debt. The publicly held debt is the total accumulation of the annual deficits less annual surpluses. The trust fund debt consists mostly of Social Security taxes and federal employee retirement funds that the government has spent on other things and now "owes" to those "trust funds." The trust fund debt is debt that the government currently owes to itself but which will be owed to individuals in the future.

The deficit is a yearly number and is the total amount spent by the government in that fiscal year over and above the total collected that year. The total collected includes Social Security taxes and other trust fund collections. When the total trust fund collections in a given year exceed the total payments for those trust fund obligations the excess amount reduces that year's deficit but increases the trust fund portion, and thus the total, of the national debt.

[Strelnikov_]

14. The Reported Deficit Is Lower Than The Growth In Debt

It seems that the reported deficit is $250-300bn lower annually than the growth in debt which reflects borrowing from the Social Security surplus. As far as I am concerned, the deficit should reflect this transfer and be reported per column (2) below.

(1) Debt at end of fiscal year (Oct-Sep FY)
http://www.publicdebt.treas.gov/opd/opdpenny.htm

(2) FY debt growth (Diff. between begin and end FY debt)
(3) Reported Deficit
http://www.cbo.gov/showdoc.cfm?index=1821&sequence=0#table11
All in $bn

..........(1) .............(2)..........(3)
FY 04 $ 7,384 (a)..$ 601 .......$480 (b)
FY 03 $ 6,783 ......$ 555 .......$375
FY 02 $ 6,228 ......$ 421 ...... $158
FY 01 $ 5,807 ......$ 133 ....(+)$127
FY 00 $ 5,674 .......$ 18 .....(+)$233
FY 99 $ 5,656

(a) Estimated from statement by Tres. Sec. Snow that current $7,384bn limit would be reached
in September or October.
(b) Estimated

[snippy]

16. I think the number you are looking for is the "on budget" deficit.

It is reported in column 3 of table 1 at your link.

[CrispyQ]

15. Thank you everyone for your replies! . . .

It's been very educational & now it makes more sense.

Damn! I love this place!!

[Tsiyu]

17. Kick!

I talked about this with two Bush cheerleaders last night. They just stared back at me blankly as if they had no clue what I was talking about.
When I said we were actually borrowing money from China now, one of them jerked his head back suddenly but wasn't ready to believe it. The other tried to interrupt and ask if I'd seen "Where that husband was arrested for killing his wife?" I ignored the interruption and said later, "Stop watching Fox News."

Anyone know who else we're borrowing from and what the terms are?

[LSK]

20. deficit is for a year / debt is total of all years

The national debt is the sum total of all suprluses and deficits for all years. The deficit is just for one year. A surplus is an opposite of deficit.

For example

1999 $1 surplus (+)
2000 $1 surplus (+)
2001 $2 deficit (-)
2002 $4 deficit (-)

that would make a debt of $4.