Surplus? US Debt Pushes $6 Trillion

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What's the difference between the national debt and the federal deficit?
The federal deficit is is the difference between what the government takes in from taxes and other sources and what it spends annually.

Imagine you made $40,000 in a year, but had $50,000 in expenses. You would have a $10,000 deficit. You would need to borrow $10,000 to make up the difference.

For many years, that's exactly what happened. The government took in less than it spent and had to borrow the difference. This was called "deficit spending."

For more information concerning the deficit, visit the Financial Management Service website to view the Monthly Statement of Receipts and Outlays of the United States Government.

The national debt can be thought of as the accumulated debt the government owes from all those years of borrowing money to pay off the annual deficits. It is the total off all money owed to individuals, corporations, state or local governments, foreign governments, and other entities outside of the United States Government. The national debt is also often called the public debt, because most of the money is owed to the public. 

Where does the government borrow money?
Most of the money the government borrows comes from -- us -- the general public. The public loans money to the government by purchasing U.S. Treasury securities like T-bills, notes, bonds and savings bonds as investments. [You can even buy T-bills and bonds online.]

Where the "surplus" came from
For the last few years, the government has not practiced deficit spending. That is, the government has been taking in more from taxes than it has been spending. As a result, the government has money left over -- a budget surplus. 

An overall "downsizing" of government and a virtual end to the arms race have contributed to the surplus, but the vast majority is coming from excess Social Security taxes being paid by the workforce in an attempt to keep Social Security benefit checks coming once the "baby-boomers" start to retire. 

Both Vice President Gore and Gov. Bush agree that the total surplus will top $4.56 trillion by 2010. Both also agree that some of the surplus should be used to pay off the national debt, some to shore up Social Security, and some given back to us in the form of tax cuts and credits. Mr. Bush says his formula would pay off the national debt by 2016. Mr. Gore says he can pay that debt by 2012.

Remember, you could pay of the national debt yourself in only 160,000 years at a dollar-a-second, but if that payment schedule is not convenient, you can simply mail in a check. The following is neither required by law, or a joke.

To make a contribution to reduce the public debt:

1. Make check payable to the "Bureau of the Public Debt"
2. In the memo section of the check, make sure you write "Gift to reduce the Public Debt"
3. Mail check to...