Deficit

A budget deficit occurs when an entity (often a government) spends more money than it takes in. The opposite is a budget surplus.

Related Topics:
Entity - Government - Money

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Total budget deficit = Structural deficit + Cyclical deficit

Related Topics:
Structural deficit - Cyclical deficit

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The size of a governmental budget deficit is often an important political issue. Fiscal conservatives denounce deficit spending and advocate balanced budgets. Keynesians argue that under some circumstances, deficit spending is justified. "Starve-the-beast" strategies usually lead to high budget deficits.

Related Topics:
Political - Fiscal conservatives - Deficit spending - Keynesians - Starve-the-beast

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Note that the deficit is distinct from the government debt (often confusingly called the national debt or public debt), which results from an accumulated deficit across a number of years. Often, a certain part of spending is dedicated to paying of debt with certain maturity, which can be refinanced by issuing new government bonds. That is, a fiscal deficit leads to an increase in an entity's debt to others.

Related Topics:
Government debt - Government bond - Fiscal deficit

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