Deficit is scary…

This is not news.
Jean Cretien (Canadian PM) pointed this fact out at the recent G8 meeting. He also pointed out that this will be to the detriment of the world’s economy. He’s right, but this is especially true for Canadians who have the greatest trade relationship (in dollars and volume) with the US of any 2 nations in the world.
At the same time, around 10 years ago or so, Canada had a deficit of 40 billion. This would be roughly comparable to the size of the US deficit, as well we had 500+ billion dollars in debt, and yet we have fiscal surpluses every year now with (relatively speaking) the fastest growing and yet most stable economy of the G8 - so it is not yet time for the US to dispair.
Also Germany and France each have deficits that are similar - relatively speaking - around 5% or so of their GNP and have had these for around 3 years. This is against the rules of the EEU and would forbid less powerful countries entry into the EEU as it causes inflation for all nations of the EEU. My concern is that more economic powers will continue to acquire these deficits at the detriment of the world of:
a) Fiscally responsible nations, and
b) Developing 3rd world nations.
The US will be fine.

Of course it is, what else would it be tied to?

@Guerrilla:

the deficit is how much more the goverment spends then it’s amount it has…. that is how I understand the words meaning… the deficit to me is going up because of the war…

where do you think these gov’ts get the money? If its a reasonably smart gov’t - it’s borrowing the money from the citizens the way of “savings bonds” (during Canada’s deficit years - i bought Canada Savings Bonds which were a couple of point higher than the interest rate and were (obviously) guarenteed by the gov’t.
The other place that gov’ts get their money is from “other sources”. Note: if it spends - regardless as to whether they have the money or not - the money has to come from somewhere. Often this is “other nations”, or from “internal sources”. Yes the deficit is increasing (more because of the post-war than the war per se), but what i am unsure of is where America is actually getting the money to pay for its armed forces, suppliers, etc. Hopefully from its people vis a vis “bonds” etc.

well, in the case of the US govt, it gets money from taxes, bonds, fines, fees, confiscated items, and i assume arms and drug sales (i would not be surprised at all if they dip their hand in that) off the table of course.

as to where the debt started, it dates back to the Revolutionary War. the debts the colonies had after the war, lasted until after the drafting of the constitution, when alexander hamilton, controversially, assumed all the state debts, in addition to the federal debt, and pledged to fund them at par. his thinking was that the national debt was a good thing. he was recognized as a financial genius, but the question over the national debt remains.

Oddly, conservative gov’ts in both US and Canada have recently developed a disposition towards increased deficit spending. Oddly as well, the “Liberal” gov’t in Canada has been working quite well to diminish the debt.
(note: i do not have a problem with deficit spending during times of recession, however it is a ludicrous thing when the economy is responding well, or on an even keel and there is debt)