Obama and Romney: Where they stand on debt

A sea of red ink is confronting the nation and presidents to come.

The budget deficit — the shortfall created when the government spends more in a given year than it collects in taxes and fees— is on track to top $1 trillion for the fourth straight year. When there's not enough to pay current bills, the government borrows, mostly by selling interest-bearing Treasury bonds, bills and notes to investors and governments worldwide. It now borrows about 40 cents of every dollar it spends.

The national debt refers to the total amount the federal government owes; the deficit is just a one-year slice.

The U.S. has been borrowing since the 1700s, when it needed money to finance the American Revolution. The outstanding debt has since risen to a shade over $16 trillion. While there's plenty of finger-pointing by politicians over who's to blame, deficits historically surge during wars and deep recessions, and the U.S. has had both over the past decade.

He acknowledges his spending on recession-fighting stimulus, tax relief and bailout programs — much of it started under former President George W. Bush — has contributed to the deficit. But so have bipartisan agreements to extend Bush-era tax cuts, and paying for the wars in Iraq and Afghanistan.

Also raising deficits: a drop in tax revenues as more people found themselves out of work and personal and corporate incomes that sagged in the deepest downturn since the Great Depression.

Deficits and debt are important because it's never good to spend more than you make for too long. The party out of power always makes deficits a big issue against the one holding the White House — as Democrats did in 2008 and Republicans are doing now.

Leaders of both parties agree the burden will become unsustainable if borrowing is not reined in while interest obligations keep rising. But huge policy differences exist over how to balance the budget or at least trim deficits to manageable levels — whether through spending cuts, tax increases or a mix.

Obama and Democrats tend to favor a combination, while Republicans mostly want just spending cuts, although Romney and Ryan say they'd also end some tax deductions and close loopholes — without specifying which ones.

The current $16.4 trillion debt limit will be reached late this year or early next. A slew of tax breaks will expire at the same time.

No matter who wins, he'll immediately have his hands full.