– You’ve probably heard that the U.S. government
has a giant deficit. Well, it’s true. But what exactly is a deficit, and how is it different from debt? Deficit is defined as an annual difference between government spending
and government revenue. Every year, the government takes in money in the form of taxes and other income, and then spends it on
things like Social Security, national defense and health care. When a government spends
more than it takes in, it’s running in a deficit, and when a government
earns more than it spends, it’s running a surplus. The national debt is something different. It’s the total amount of money that the U.S. federal government owes to its creditors, citizens, foreign governments, and more. In 2019, America’s debt stands
around $22 trillion dollars, which is considered the
largest debt in the world. Some argue this isn’t too
big of a problem right now because credit is cheap and
foreign countries are eager to put money into U.S. debt. But others warn that increasing debt could jeopardize the economy in the future and put at risk Social Security and other benefits for
younger generations. And with each year,
the national debt grows by accumulating the deficit
from the previous year. It’s a cycle that’s hard to break, but it’s essential to do so
if we want to put our nation on a better path for economic growth.