Good Question

Good Question: National Debt vs. National Deficit

SACRAMENTO (CBS13) ― I've received a few e-mails recently with questions about the national debt, and tonight I'm focusing on two -- one from Paul Hartman in Sacramento and one from Jim Peck in Modesto. For the answers, I consulted an economist.

Dr. Suzanne O'Keefe, an economics professor at Sacramento State, explains.

"The national deficit is the one-year measure of the difference between the amount of money the government gets in taxes and the amount it spends on all the goods and services that we see from the government," says Dr. O'Keefe.

So the deficit is how far the government goes into the red for one year only…

"The debt is the accumulation of all the deficits we've had the past, totaled up to the amount the government owes," says Dr. O'Keefe.

So every year the government has a deficit, we go farther into debt. A lot of people are concerned that the national debt is growing and we're not hearing a lot about it these days. Is there reason to be concerned?

Dr. O'Keefe says it depends on who you talk to, but suggests you might compare it to your budget. We know it's risky to keep running up our credit card bills, because at some point we might not be able to afford to pay that monthly statement.

"Yet our country has been able to afford the interest payments on the debt and expects to continue to be able to pay the interest on the debt," says Dr. O'Keefe.

She points out another concern.

"Seven and a half percent of total government spending goes to paying interest on that debt," Dr. O'Keefe says.

That's money you're not spending on healthcare or education. As for why we don't hear more about it, O'Keefe suggests we're more concerned about immediate problems, like the housing market and how it's dragging down the economy, for example.

The government's answer to our economic crunch was to pass that economic stimulus package and send out checks. That will likely raise our debt, but short-term, it's expected to make our economy stronger.

Web Extra: One viewer wanted to know why you couldn't print more money to pay off the debt, and of course there's the controversy over borrowing from foreign countries. View the answers to these questions in the video player to the right.

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