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What's the difference between the U.S. deficit and the national debt?

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Author's Note: What's the difference between the U.S. deficit and the national debt?

It must be kind of fun to work for the Congressional Budget Office. This independent, nonpartisan agency is assigned the task of predicting the economic effects of proposed policy decisions. While politicians of every stripe are stumping for their own deficit reduction plan, the whiz kids at the CBO are crunching the numbers and doling out the cold, hard facts. Make all the spending cuts you want and raise taxes on the rich, says the CBO, but unless some serious structural changes are made to Social Security and Medicare, the federal government will still continue to spend more than it has in the bank. In that sense, it must be a little depressing to work for the CBO. Because despite the bluster and hopeful promises of politicians, you know all too well that the math just doesn't add up.

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Sources

  • Bureau of the Public Debt. "How does the U.S. Government borrow money?" (March 7, 2013) http://www.treasurydirect.gov/kids/what/what_borrow.htm
  • Calmes, Jackie. "Cuts to Achieve Goal for Deficit, But Toll is High." March 2, 2013. The New York Times. (March 7, 2013) http://www.nytimes.com/2013/03/03/us/politics/cuts-to-achieve-goal-for-deficit-but-toll-is-high.html?_r=0
  • Congressional Budget Office. "Choices for Deficit Reduction." Nov. 8, 2012. (March 7, 2013) http://www.cbo.gov/publication/43692
  • Congressional Budget Offices. "Fiscal Tightening in 2013 and Its Economic Consequences." Aug. 22, 2012. (March 7, 2013) http://www.cbo.gov/publication/43544
  • Congressional Budget Office. "Historical Budget Data – Feb. 2013 Baseline Projections." Feb. 5, 2013. (March 7, 2013) http://www.cbo.gov/publication/43904
  • Krugman, Paul. "Kick That Can." The New York Times. Feb. 7, 2013. (March 13, 2013) http://www.nytimes.com/2013/02/08/opinion/krugman-kick-that-can.html
  • Lowrey, Annie. "Federal Deficit for 2012 Falls to $1.1 Trillion." The New York Times. Oct. 12, 2012. (March 13, 2013) http://www.nytimes.com/2012/10/13/business/federal-deficit-for-2012-fiscal-year-falls-to-1-1-trillion.html?_r=1&
  • Newport, Frank. "Congress Approval Stagnant at Low Level." Gallup. March 11, 2013. (March 15, 2013) http://www.gallup.com/poll/161210/congress-approval-stagnant-low-level.aspx
  • Sahadi, Jeanne. "Washington's $5 trillion interest bill." CNN Money. March 12, 2012. (March 13, 2013) http://money.cnn.com/2012/03/05/news/economy/national-debt-interest/index.htm
  • U.S. Department of the Treasury. "The Debt to the Penny and Who Holds It." March 5, 2013. http://www.treasurydirect.gov/NP/BPDLogin?application=np
  • U.S. Department of the Treasury. "Frequently Asked Questions About the Public Debt." (March 7, 2013) http://www.treasurydirect.gov/govt/resources/faq/faq_publicdebt.htm
  • U.S. Department of the Treasury. "Major Foreign Holders of Treasury Securities." (March 7, 2013) http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt

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