There are two deficits that folks need to keep in mind... The first is a "cumulative deficit", i.e national debt, that takes into account not only what deficits and administration has inherited but the various interests that will fluctuate... The other is the "annual" deficit which deals with only a yearly snapshot of how an administration has done in a one year period...

The "cumulative deficit", i.e, that the country is now dealing with is mostly George Bush's wars that weren't paid for but borrowed for...

When we look at "annual deficits", the '09 budget was the last Bush proposed as the outgoing president leaves the next with the first year budget... Bush's came in a $1.4T... Obama's first "annual deficit" for 2010 came in at $1.3T... In simple words, that meant that the Obama administration cut the annual budget deficit by $100B with his first budget...

Now back to the cumulative deficit... T notes go up and down depending on how investors feel about the condition of the economy...

The US has long been looked at as this pillar of security and thus people have wanted to invest in *US* because they feel certain that their investments are safe...

Here's the rub if the Republicans push *US* into default... Investors will want more interest because that safety net will become shredded... This will drive up interest rates to consumers... This will also decrease the amount of $$$ that other folks, especially the Chinese, will want to invest in *US*... I other words, it will hurt our economy at a time when we need to keep investors confident in *US*...

Econ 001 (remedial, non credit...)

B~