European Union officials are spending the weekend preparing a massive bailout package to deal with Ireland's debt crisis. Meanwhile, protesters took to the streets of Dublin to denounce the painful public spending cuts heading their way.
On the other side of the Atlantic, Washington is bracing for the official release of recommendations from President Obama's National Commission on Fiscal Responsibility and Reform.
And if an unscientific survey of people at a suburban Maryland is any indication, we could use a primer on the differences between debt and deficits.
"I don't think I do know the difference," says Kohl's shopper John Matsick. "There is a difference?"
L.T. Jones, a Washington, D.C., resident, chimes in: "I don't think I can explain the difference honestly. Personally the only thing I can worry about right now is that I have debt."
This Year Vs. History
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, tells NPR's Audie Cornish the terms are often confused.
"The deficit is how much the government borrows each year — it's how much more it spends than it takes in in revenues," she says. "The debt is all the borrowing we've done, accumulated. So the debt is trillions and trillions of dollars because it's each year's deficit layered upon the previous years."
She says the United States is in a dire position — with projections that the government will never be able to balance the budget, that there will always be deficits. That situation, MacGuineas says, is the result of overconsuming for too long.
"We're over-leveraged," she says. "I think leverage — or borrowing — was the theme that really put us into this crisis that we've recently endured. And, in order to help get out of it, we've had to borrow more. ... We have to figure out a way to not live beyond our means, both in the family level and in the federal government level."
MacGuineas says in the 1990s, on the heels of a large deficit, the White House and Congress "woke up to the concerns about deficits and debt.
"They did all the things that you have to do to bring deficits down," she says. "They raised taxes, they cut spending, they put strong budget rules in place to keep these things on track — and we made a lot of progress, progress that was really bolstered by a growing economy and a stock market bubble."
Those efforts were bolstered by a baby boomer generation in the prime of their working years.
The Return Of Red Ink
But once budget surpluses returned, MacGuineas says, official Washington lost its resolve, and the cycle started over.
"Suddenly it was tax cuts and spending increases everywhere," she says. "It was Christmas. We got everything we wanted. The narrative in this country changed from fiscal responsibility to 'deficits don't matter.' ... And nobody tried to pay for the policies that they put in place."
In the coming months, MacGuineas says, she doesn't think it's realistic for Americans to hold out for a balanced budget. But she thinks debt reduction, as a percentage of the overall economy, is possible.
Ultimately, she's hopefully the White House's fiscal commission will make progress. But she warns to watch out for false promises.
"We're not going to grow our way out of these problems. We can't do it by cutting taxes more or spending more," she says. "You have people who are always making claims that sound great if only they were true — but it's wishful thinking."