What is our Federal debt and Federal deficit

The terms “debt” and “deficit” are often confused on the United States. I introduce: Federal Finances 101

A “deficit” is a shortfall of a BUDGET allotted to the government. There is also something called a DEBT. (read on… I’ll explain it all)

Analogy: You earn $500 a week. Your weekly budget is $500 a week. But you spend $550 a week.
You’re spending habits have been going on like this for two years.
Your budget “deficit” is $50. Your debt is $5,200 ($50/week x 2 years).

Annual BUDGETs are decided and changed on an annual basis by Congress. The DEBT is an ongoing tally since our countries’ inception.

Budgets change on an annual basis making the “deficit” to any annual budget unsubstantiated unless you have BOTH figures (budget allowance and deficit figure).

Below are the budgets for recent years. NOTE that the budget in 2008 was nearly a TRILLION dollars less. Also note that each year the budget was raised by about 100 billion dollars. See the budget jump in 2010?

A “fiscal year” is not a “calendar year.” Example: agencies of the federal government, fiscal year 2011 refers to the time between October 1, 2010 and September 30, 2011. The years indicated below are in “fiscal years.” The elected President is in (  )

To understand the numbers below let me give you an example: The 2010 budget for Obama was $3.6 Trillion. He actually spent $4.95 Trillion which gave him a “DEFICIT” of $1.35 Trillion. Likewise the 2007 budget for Bush was $2.8 Trillion. He actually spent $2.96 Trillion which left him with a “DEFICIT” of $162 Billion. WE were screaming hysterically about an out of control budget when Bush overspent by less than $200 Billion. Obama overspent by (16 times the rate) nearly 1 1/2 TRILLION with an even larger budget. Where’s the screaming now?

2011 — $3.8 Trillion Budget (Obama) — projected estimate based on Presidential request earlier this year.

2010 — $3.6 Trillion Budget w/ “deficit” of $1.35 Trillion and DEBT of $13.562 Trillion (Obama)

2009 — $3.1 Trillion Budget w/ “deficit” of $1.4 Trillion and DEBT of $11.910 Trillion (Obama)

2008 — $2.9 Trillion Budget w/ “deficit” of $455 Billion and DEBT of $10.025 Trillion (Bush)

2007 — $2.8 Trillion Budget w/ “deficit” of $162 Billion and DEBT of $9.008 Trillion (Bush)

2006 — $2.7 Trillion Budget w/ “deficit” of $248 Billion and DEBT of $8.507 Trillion (Bush)

2005 — $2.4 Trillion Budget w/ “deficit” of $319 Billion and DEBT of $8.027 Trillion (Bush)

2004 — $2.3 Trillion Budget w/ “deficit” of $413 Billion and DEBT of $7.379 Trillion (Bush)

2003 — $2.2 Trillion Budget w/ “deficit” of $374 Billion and DEBT of $6.793 Trillion (Bush)

2002 — $2.0 Trillion Budget w/ “deficit” of $157.8 Billion and DEBT of $6.228 Trillion (Bush)

2001 — $1.9 Trillion Budget w/ “SURPLUS” of $127 Billion and DEBT of $5.807 Trillion (Bush)

2000 — $1.8 Trillion Budget w/ “SURPLUS” of $236.4 Billion and DEBT of $5.674 Trillion (Clinton)

1999 — $1.7 Trillion Budget w/ “SURPLUS” of $125.6 Billion and DEBT of $5.656 Trillion (Clinton)

1998 — $1.7 Trillion Budget w/ “SURPLUS” of $69.2 

Rarely talked about, the primary reason for the “surplus” during the Clinton era was due to the enactment of the Taxpayer Relief Act of 1997. With the introduction of the Roth IRA a taxpayer could roll his traditional retirement account into a Roth. The claim to fame is that the taxes are paid as monies go INTO the IRA rather than when the monies are withdrawn. Touted as a tax advantage it generated billions of dollars to the Clinton administration while future administrations would now receive no anticipated tax revenue when the accounts matured. President Obama has revived a new “rollover period” in his administration.

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