The 44th president's $4 trillion headache

[usakos]

The candidates want to do things like reduce taxes and fix health care. But they'll have to deal with the cold realities of the federal budget.

Read the entire article at CNNMoney.com

PS: for those who get real sickly vomit when i post news articles on here; well, too bad, just go away.

[BusinessAdviser]

Just to clarify, the federal budget and national debt are two different, though related, issues. The federal budget can be analogized to a cash flow statement, while the national debt can be analogized to a balance sheet. Each year, the federal budget either raises or lowers the national debt, depending on whether there is a budget surplus or a budget deficit.

Now, at the outset, it's important to understand that there is nothing inherently "bad" about a budget deficit and there is nothing inherently "good" about a budget surplus. Rather, they are merely tools to be used by the government to keep the economy in balance. For example, when the economy is slowing, the government should run a budget deficit in order to keep the economy moving along, but when the economy is soaring, the government should run a budget surplus to slow the economy and decrease inflation.

The national debt, to which the "$4.4 trillion headache" refers, is the overall debt owed by the U.S. government, which is basically the sum of each year's budget surplus or deficit throughout the U.S.'s history.

What effect this debt has on today's economy is argued often. History has shown that it really has no effect currently. However, it is hard to imagine that it won't have some effect sometime in the future.

[Gaulkin]

Listen we can be 10000000000000 trillion in debt but the fact is we are the greatest country in the world, we dont have to pay anyone back if we dont want to. What are they going to do about it? Not a damn thing.

[BusinessAdviser]

Listen we can be 10000000000000 trillion in debt but the fact is we are the greatest country in the world, we dont have to pay anyone back if we dont want to. What are they going to do about it? Not a damn thing.

Though that may be true now, it doesn't sound like a very intelligent attitude. I doubt that any world power throughout history ever thought that it would fall, but didn't every last one of them?