"That's suicide in business."

BALANCED BUDGET: when the government takes in the same amount it spends.

DEFICIT: when they spend more than they collect and have to borrow money to keep providing services. The deficit is an annual amount that is added to the debt.

DEBT: the total amount the government has borrowed over the years and still owes to other countries and banks. This number increases due to interest accumulation and when the annual deficit is added to it.

SURPLUS: when the government collects more than it spends.

When there is a surplus, the government can use the extra money to pay back its debt faster. In 2001, George W Bush opted instead to send everybody a tax refund, then the economy collapsed and Sept 11 happened. When people make less money they pay fewer taxes and the government collects less money.

When Bush took office in 2001 there was a surplus for the first time in half a century. Within two years the government is now running one of the biggest deficits in history. In 2004, the government will spend $1.16 for every dollar it collects.

During the first Bush administration in 1992, Ross Perot noted that over 70% of the debt had been financed in short-term loans. The businessman warned, "That's suicide in business, that's suicide in your personal life, and that's suicide in your government."

To Perot's surprise, the Clinton administration actually balanced the budget and began paying off the debt ahead of schedule. Despite Perot's last-minute endorsement of George W Bush in the 2000 election, as you can see in the deficit chart above, Bush's spending habits have been much the same as his father's.