Deficit and Debt
Debt -- How much you currently owe.
Deficit = How much more you spend in a year than you take in.
The current national debt stands at roughly 14.2 trillion dollars.
The projected U.S. GDP for the 2011 year is 15.2 trillion dollars.
The current budget proposal for 2011 is roughly 3.8 trillion.
The proposed budget deficit for the year 2011 is 1.5 Trillion
which means that the current revenue of the U.S. government is roughly 2.3 Trillion
This means that the government proposes to spend 66% more than it take in for 2011.
In fact, no year in the president's 5 year budget proposal proposes a surplus. That means after 5 years of changes, the president still cannot conceive a year where the government can spend the same amount of money it takes in or less.
At the end of the 2011 year, the U.S. government will owe money equivalent to the the entire GDP of the country and it will owe 6.6X the current revenue that the government takes in.
For comparison sake, let's say that this is a person that we are talking about. Let's say that this person makes $50,000 a year. That person already owes $308,000. They intend to spend about $82,608 this year, increasing their total debt to $330,000 by the end of the year. Interest on the debt will be $11,500 per year. That means that 23% of the person's income is going to be devoted to paying interest on the debt (at current debt prices), and obviously that number is just going to increase as the debt increases.
Do you want to be a holder of that debt at 3.5% annually? What if that person has the power to decide to only pay you $.80 on the dollar or $.60 on the dollar (remember that you are only getting 3.5% interest on the debt).