In his State of the Union speech on Wednesday, President Obama is expected to address the federal deficit, which economists warn is growing at unsustainable levels.

Concerns over the size of the deficit have fueled public anger directed at Congress and the White House and helped create the Tea Party movement dedicated to lower taxes and shrinking the federal government. They also contributed to Republican Scott Brown’s upset victory in a Massachusetts Senate race.

The gap between the money the nation takes in and what it spends is higher as a share of the economy than it’s been since the end of World War II. Unlike that period, however, the nation is not about to enjoy an increased labor force from returning soldiers. Instead, Baby Boomers are retiring and expanding the rolls of Social Security and Medicare.

Even after the economy pulls out of the recession, the debt is projected to grow much faster than the economy.
Here’s a look at the issue:

Question: What’s the difference between the deficit and the debt?

Answer: In personal terms, your deficit refers to how much more you spent last year than you earned. The debt is the accumulation of all your years of deficit spending – what you owe on your mortgage, student loans, car loan and credit cards, for example.

Q: How much does the country owe?

A: The federal deficit last year was about $1.6 trillion – more than Canada’s annual economic output. The national debt is $12.3 trillion – nearly $40,000 for every man, woman and child in America. Of that, $4.5 trillion is owed by one part of the government to another and $7.8 trillion is owed to the public – including foreign investors – through federal securities.

Q: How much is too much?

A: Debts and deficits are usually viewed as a percentage of the economy. If you carried a mortgage of $100,000, that could be manageable if your income was $50,000, but not if it’s $15,000.

Because of the recession and increased spending to stimulate the economy and help the financial, housing and automotive industries, the deficit is now about 11 percent of the Gross Domestic Product. Even after the recession ends, the deficit isn’t projected to fall below 3 percent of GDP, a level economists say is sustainable. Unless the deficit is controlled, the public debt could grow to 68 percent of GDP by 2019 and be twice as large as the economy by 2038.

Q: What kind of changes are we talking about?

A: Reducing the deficit to 3 percent of GDP by 2019 would require cutting the projected deficit by more than half, a much bigger cut than the deficit-reduction efforts in 1982, 1987, 1990 and 1993, according to the Center for Budget and Policy Priorities. To keep the debt at current levels through 2050, the government would have to raise taxes 28 percent or cut spending 22 percent, or some combination, over the next 40 years.

Q: Why can’t we “grow” our way out of the problem?

A: Even if the economy grew faster than it did during the Reagan and Clinton administrations, there would not be enough increased revenue to balance the budget by 2019. Many experts say it will take tax increases, spending cuts and most likely both to balance the budget.

Q: What’s so bad about the nation being in debt? How could it affect me?

A: The more the federal government has to pay in interest on the debt – already one of the largest items in the budget – the fewer dollars are available for things like roads, schools and health care. Deficits also can lead to higher interest rates, reduced economic growth and lower wages, and they could cause foreign investors to lose confidence and stop financing U.S. debt.

Q: Is the problem caused by the recession and all the money spent recently to bail out Wall Street and stimulate the economy?

A: The debt is shooting up because of decreased tax revenues and the extra federal spending. But the problem, experts say, is not the cyclical deficit but the structural one. Social Security, Medicare, Medicaid and interest on the debt could consume 92 cents of every $1 the government raises in taxes by 2019. Unlike other federal programs, Social Security, Medicare and Medicaid are projected to grow much faster than the economy because of rising health care costs and the aging of the population.

Q: What if we eliminate foreign aid and the pet projects – or earmarks – that members of Congress include in spending bills to benefit constituents?

A: Foreign aid, along with the cost of maintaining embassies and conducting diplomatic operations, is less than 2 percent of federal spending. Earmarks represent less than 1 percent of the current budget. And earmarks are typically carved out of funding already allocated to a specific program, not added on as additional spending.

Q: Once we start bringing troops home from Iraq and Afghanistan, will we get a “peace dividend” similar to what happened after the Vietnam War?

A: The military grew smaller after the Vietnam War, and no one is proposing cutting it back now, so the savings won’t be as great.

Q: What if Congress extends the 2001 and 2003 tax cuts for families earning less than $250,000, as the president said he wants to do?

A: That would add more than $2 trillion to the debt over the next decade, according to the Peterson-Pew Commission on Budget Reform.

Q: There were dire warnings about the deficit in the 1990s and then the budget was balanced. Can the government do now what it did then?

A: Various factors make that more difficult today. The debt is larger and the economy weaker than it was then. The federal government was helped by the technology boom’s boost to the economy. Baby Boomers were at their peak earning years, so were paying lots of taxes. Today, they’re increasingly drawing Social Security checks.

Q: What’s this I’ve heard about a commission that would figure out how to balance the budget?

A: Some lawmakers have proposed creating a bipartisan commission that would recommend changes to Congress. There’s debate over how much power the commission would have, and some lawmakers don’t want to give up any budget authority. Some interest groups, including the AARP, oppose the idea.