This paper covers seven key points about the national debt, budget and trade deficits, and the dollar that the public needs to understand in order to be well-informed and prepared to choose among various policy options.
The brief discusses the following points:

•The national debt is not literally a generational transfer

•The high dollar, not the budget deficit is what causes the trade deficit and foreign borrowing

•A large trade deficit requires that we have a very large budget deficit, extremely low private savings, or some combination thereof

•The stock and housing bubbles led to an enormous reduction in private savings through the wealth effect

•In times of economic weakness like the nation is experiencing now, deficit spending actually helps the economy to grow

•High and rising private sector health care costs in the United States are responsible for the bulk of the federal budget deficit

•Social Security has a dedicated stream of financing and does not directly contribute to the federal debt