Can someone please explain the difference between the debt and the deficit?
If you decrease the deficit doesn't it decease the debt? How do we pay for the debt?
- МішаLv 79 years agoFavorite Answer
Deficit is your revenue being less than your expenses. This does not automatically mean debt -- for example, you may have had savings.
= If you decrease the deficit doesn't it decease the debt?
No, to decrease the debt you must have a surplus -- and use that surplus to pay off (part of ) the debt. As long as you have deficit -- however small -- your debt will keep growing (even if slower).
= How do we pay for the debt?
By earning more and spending less in the future -- thus generating a surplus and using it to pay off the debt.
No, seriously, this is possible for a country. For example, the US did pay off the debt incurred, while fighting the WW2...
- ?Lv 59 years ago
Deficit = the budget shortfall per year
Debt = the deficit that has built up over 200 years, about 14 Trillion $.
Obama's proposed deficit for 2011 = 1.6 trillion $
That's 10% of every thing we've owed before added on.
Contrary to popular belief Clinton did not have a surplus,he had a projected surplus.
Meaning,if everything went perfectly for ten years,there would be money left over.
- Philip HLv 79 years ago
The Debt is what the Corrupt and Irresponsible officials in Washington DC are sticking your grandchildren with.
The deficit is what Foolish Citizens who fall for those Corrupt Politicians are asking the Government to waste this year.
I know, not accurate, but realistic.
- Occam's RazorLv 59 years ago
The deficit is the short term year-by-year money owed.
The debt is the total of the years of deficit.
During Clinton's time in office, the country didn't have a deficit. It had a surplus.
During Bush's eight years, we spent down the surplus and became saddled with one of the largest deficits (and debt) in US history.
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- Mukesch KaleyLv 79 years ago
It's the other way around ... debt increases deficit as you pay interests on debts. debt are long term measures and are not for balancing deficits. deficits are balance dby taxes. easier that way, as taxes are never returned and debt stands returnable.
- 9 years ago
The deficit is how much we spend compared to how much we bring in per year.
So if we overspend, that money we overspend contributes to the national debt. But if we don't overspend, that extra money (surplus) we could use to help pay back our national debt.
Or, like Bush, you could write everyone a check for a couple hundred dollars.Source(s): AP US Government & Politics
- ?Lv 69 years ago
Debt is overall what we owe, deficit is how much we spend over the annual budget.
- daddioLv 79 years ago
deficit is annual debt is total