"S&P has said their decision to downgrade the U.S. was based in part on the fact that the Budget Control Act, which will reduce projected deficits by more than $2 trillion over the next 10 years, fell short of their $4 trillion expectation for deficit reduction."
This confuses me. I'd always understood "deficit" as the amount the government spends more than it takes in, in a given year, and "debt" as the cumulative deficit, i.e., total money owed.
In this case, it seems like they're using "deficit" to mean total debt? Or is the US really increasing our debt by more than $4 trillion a year, and this is a plan to overspend by less?
First of all the $4 trillion was over 10 years, not 1 year. Second, as far as I know, they haven't actually done any spending cuts - just cuts from the "spending increase" they were planning.
And USA may "plan" $4 trillion dollar less spending, but that doesn't mean they will actually do it. Right now the deficit keeps rising, and fast. It's supposed to go down, not up.
This confuses me. I'd always understood "deficit" as the amount the government spends more than it takes in, in a given year, and "debt" as the cumulative deficit, i.e., total money owed.
In this case, it seems like they're using "deficit" to mean total debt? Or is the US really increasing our debt by more than $4 trillion a year, and this is a plan to overspend by less?