The financial situation is a major problem that must be addressed, former New York Mayor Rudy Giuliani said at the start of the debate.
Rep. Duncan Hunter of California called the budget deficit and the trade loss a threat to national security.
Texas Rep. Ron Paul agreed, saying, "It's absolutely a threat to our national security because we spent too much, we taxed too much, we borrowed too much, and we print too much."
Former Massachusetts Gov. Mitt Romney said the best answer for economic woes is to "make sure we have good jobs for our citizens, good schools for our kids, good health care for everyone and that we have policies that promote the growth of the nation."
The debate, sponsored by The Des Moines Register and Iowa Public Television, marks the last time the GOP presidential hopefuls will appear on the same stage before the crucial Iowa caucuses on January 3.
When asked what his plan is for keeping foreign markets open while protecting American jobs, former Arkansas Gov. Mike Huckabee said excessive taxation "penalizes the productivity of a company."
"You add to that excessive regulation, which means that you've got more red tape than is possible to get through," he said. "I can't part the Red Sea, but I believe I can part the red tape."
When asked to raise their hands if they believed global climate change is a serious threat and caused by human activity, former Tennessee Sen. Fred Thompson said he wasn't "doing hand shows today."
Other candidates agreed. Thompson asked if he could answer the question instead, but was told no.
The Democratic candidates will face off at 2 p.m. on Thursday.
The battle to win Iowa has increasingly come down to Romney and Huckabee, who has surged to the top of the polls largely due to the support of evangelical Christians.
A McClatchy-MSNBC poll conducted earlier this week had Huckabee leading the GOP field with the support of 32 percent of likely caucus-goers. Romney, who had been leading in Iowa for months, was at 20 percent in that poll, which had a margin of error of plus or minus 5 percentage points.
Romney has sharpened his attacks on Huckabee, particularly on immigration, the issue the Romney camp views as one of his rival's biggest vulnerabilities, after the Arkansas Republican began rising in the polls. Huckabee was only at 12 percent in Iowa in September, according to the McClatchy-MSNBC poll. Video Watch Huckabee respond to Romney's latest attacks »
While Iowa's population is overwhelmingly white, the state's agricultural industry is attracting an increasing number of both legal and illegal Hispanic immigrants. The influx of these new workers has created a backlash among certain segments of Iowa's electorate, and is a hot button issue in the Republican presidential nominating contest.
Some GOP candidates are not only airing television ads touting their personal positions on illegal immigration, but they are also criticizing their opponents for being weak on the issue.
On Tuesday, Romney, who has lost his front-runner status in polls to Huckabee in Iowa, began airing an ad, titled "The Record." The ad compares the candidates' conservative stands on social issues but draws a sharp contrast on their track records on immigration policy, particularly the fact that Huckabee supported in-state tuition for children of illegal immigrants in Arkansas while Romney opposed a such a measure in Massachusetts. Video Watch Romney's ad »
During an event Tuesday in Council Bluffs, Iowa, Huckabee called the ad "desperate" and said he thought it would backfire.
"I'm somewhat flattered in that I seem to be the recipient of the first negative attack ad in the Republican primary," Huckabee said. "That's usually the kind of desperation on the part of an opponent who feels that his only way of winning is to attack and destroy."
Tensions between Romney and Huckabee also picked up Wednesday over an article scheduled to appear in Sunday's New York Times Magazine.
In it, Huckabee asks "Don't Mormons believe that Jesus and the devil are brothers?"
Romney, who would be the nation's first Mormon president if elected, said Huckabee's question was out of bounds.
"I think it is totally appropriate to contrast their own record with the opponent, to talk about their differences on issues," Romney said in an appearance on NBC's Today show Wednesday. "But attacking someone's religion is really going too far."
"It is not the American way," he said.
In a statement, a Huckabee senior adviser, Charmaine Yoest, said Huckabee "believes this campaign should center on a discussion of the important issues confronting our nation and not focus on questions of religious belief."
While Romney and the other Republican candidates may continue to attack Huckabee during Wednesday's debate, CNN commentator Roland Martin said the sharp Huckabee could backfire on him and turn off Iowa voters.
"They're going to go after Mike Huckabee in their debate," Martin said, "but I think they must be very careful because he's been able to play this sort of role of being the nice, well-liked guy.
"If you attack him, he may see it as a badge of honor," Martin said.
But Cheri Jacobus, a Republican strategist said the other candidates have to aggressively, if carefully, differentiate themselves from Huckabee if they want to do well in the Hawkeye State.
"This is the last chance really for folks to get to really take a good close look at these candidates," Jacobus said. "I think you will see the arrows pointed at Huckabee," she said. "The problem and the way these folks have to finesse during this debate is they have to be able to draw the contrast without going negative.
"It's a pretty tricky thing, but they have to do it," she added.