Breaking a record is almost always good  – except when it comes to the deficit. The federal deficit is set to reach its highest figure ever: $1.65 trillion for this fiscal year. That would make it more than 10 percent of the toal economy, the highest level since 1945. And that is just for the current year. In total, the national debt  – the cumulative total of deficits since the beginning of the Republic  – is set to grow from $14 trillion today to $16.7 trillion by September 30, 2012. Lawmakers will begin debating $61 billion in budget cuts for the remaining months of this fiscal year today, but what will those cuts mean for average Americans? Joining us is Gus Faucher, an economist with Moody's Analytics, who says that while there is no long term fiscal gain without short term pain, the proposed cuts in discretionary spending are just a drop in the bucket.

Related Stories