--- "Deficit" vs. "Debt"--Suppose you spend more money this month than your income.

This situation is called a "budget deficit". So you borrow (ie; use your credit card). The amount you borrowed (and now owe) is called your debt. You have to pay interest on your debt. If next month you spend more than your income, another deficit, you must borrow some more, and you'll still have to pay the interest on your debt (now larger). If you have a deficit every month, you keep borrowing and your debt grows. Soon the interest payment on your loan is bigger than any other item in your budget. Eventually, all you can do is pay the interest payment, and you don't have any money left over for anything else. This situation is known as bankruptcy. "Reducing the deficit" is a meaningless soundbite. If the DEFICIT is any amount more than ZERO, we have to borrow more and the DEBT grows. Each year since 1969, Congress has spent more money than its income. The Treasury Department has to borrow money to meet Congress's appropriations. Here is a direct link to the Congressional Budget Office web site's deficit analysis. We have to pay interest* on that huge, growing debt; and it cuts into our budget big time. America's collective debt, also called the national debt or the public debt, represents the money that the U.S. government owes to the owners of debt instruments that are issued by the U.S. treasury. There are several types of debt instruments issued by the U.S. Department of the Treasury. All of these items are collectively called treasuries. America has always had debt. Since the 18th century, the country has carried a load of debt that has fluctuated with the political and social climate of the day. In 1860, America s debt was $65 million. The Civil War brought about a major spike in the debt. World War I and World War II also brought about major rises in the debt. The latest American debt numbers have put it at its steepest numbers since the debt level spiked during World War II. America s debt, as owed to foreign nations, has been rising steadily over the years. The gross debt in trillions of U.S. dollars was about $10 trillion in 1940. In 1950, it had risen to about $18 trillion. After falling for a few decades, it began rising again in the late 1980s. In 2009, America s debt was again up to $18 trillion. It is projected to continue to rise over the next few years. By 2011 it is projected to be about $20 trillion. The projected amount of American debt in the next few years equals 100 percent of the U.S. GDP. Foreign Held Treasury Securities in U.S. Dollars China holds $798.9 billion in American debt. Japan holds $746.5 billion in U.S. debt. The U.K. holds $230.7 billion of the U.S. debt. Brazil holds $156.2 billion in U.S. debt. Hong Kong has $142.0 billion of the American debt. Russia has $122.5 billion of American debt. Luxemburg holds $90.8 billion of the American debt. Taiwan has $78.7 billion of America s debt.

Switzerland owns $71.5 billion of America s debt. Germany holds $52.8 billion in American debt. South Korea has $42.2 billion of the U.S. debt. Canada has $40.8 billion in American debt. Ireland has $38.3 billion in U.S. debt. France has $36.2 billion in U.S. debt. Singapore has $35.2 billion of the U.S. debt. India owns $32.9 billion of the American debt. Turkey owns $30.4 billion of the U.S. debt. Thailand holds $30.1 billion in U.S. debt. Norway holds $24.9 billion in American debt. Mexico holds $20.7 billion of U.S. debt.