It was a year of historic change in business, economics, and finance. General Motors and Chrysler made whirlwind trips through the bankruptcy process, and the U.S. Senate narrowly voted in favor of health care reform in a dramatic vote on Christmas Eve morning, bringing President Obama just this close to achieving a top campaign priority. In other times, any one of these sagas might have been an obvious and easy selection as the business story of the year. Yet 2009 was so full of drama that health care reform will have to settle for a position on the short list, and Chrysler might not have made the list at all if it hadn't been paired with GM.

So here's Portfolio.com's take of the most important business, economics, and finance stories of the year, selected with an eye toward which ones had the biggest hand in shaping the world for now and for the foreseeable future.

1. The U.S. Deficit. The era of federal budget surpluses seems impossibly long ago. The Congressional Budget Office has forecast that the deficit for the current fiscal year will hit an astonishing $1.4 trillion, up from $459 billion at the end of 2008. The cost of war and bank bailouts has pushed the U.S. deeply into the red, and not without consequence. Global investors are worried that the nation is overextended. They are starting to demand higher interest rates to offset the perceived rise in risk associated with U.S. credit. That will raise borrowing costs for consumers and businesses across the country. More importantly, the record deficit means the U.S. will have less capacity to invest in its educational system and infrastructure, which are key to global competitiveness and already have been surpassed in some important areas. The deficit is closely linked to living standards in the U.S. and to the country's standing in the global economy. It is driving everything from higher interest rates to a weaker dollar.

2. Government Financial Intervention. Economists are now crediting the stimulus, despite its political detractors, with cushioning the worst of the recession and contributing to positive growth in the third quarter. Yes, it was expensive, but total systemic financial failure would have been a lot worse. And TARP—the bank bailout that began in 2008—continued to fulfill its purpose this year by keeping the big banks afloat, which helped unfreeze the debt and equity capital markets for institutions in early 2009. Fed chief Ben Bernanke and Treasury Secretary Tim Geithner did what they needed to do and kept the U.S. economy from melting down.

3. The Rise of China. The weakness of the U.S. federal balance sheet has coincided with continued growth in China. China's strength has a multiplier effect on U.S. competitiveness. For every step back here at home, China takes one or two forward, putting the U.S. at greater relative disadvantage. China already is close to surpassing Japan as the second-largest economy in the world, and it won't stop there. It just raised its economic-growth estimate for 2008 to 9.6 percent from 9 percent, and it expects growth of 8 percent next year. Anne Applebaum, of Slate, notes that China is investing in superfast trains that can travel 250 miles an hour—fast enough to make the trip from Washington to New York in less than an hour. That is going to open up the vast interior of China to the sort of investment and development that has been underway in its cities for years. Once that happens, a huge middle-class consumer society is likely to emerge in China. And when it does, China will start drawing corporations and executives from all over the world, forcing the U.S. and Europe to compete for capital and investment as never before.

4. Wall Street Fiends. Corruption has always gone hand in hand with investing. But the world learned something about the breadth and depth of that corruption in 2009. Bernhard Madoff, who was arrested in December 2008 and pled guilty in March 2009, was more than just the largest Ponzi scheme operator in history. The former Nasdaq chief represented the chilling institutionalization of that criminality. The implosion of the Galleon Group hedge fund added more evidence. Outrage over the cases provoked a public sense of violation, which was fed by the huge bonuses that Wall Street bankers reaped even as their companies received enormous bailouts.