Free US Law Dictionary
BETA
Deficit
Australia • British Virgin Islands
Canada • China • Colombia
France • Germany • Hong Kong
India • Indonesia • Ireland
Netherlands • New Zealand
Peru • Russia • Singapore
Tanzania • United Kingdom
United States • European Union
v • d • e
Tax rates around the world
Tax revenue as % of GDP
Central bank · Money supply
Gold standard Fiscal policy
Spending · Deficit · Debt Policy-mix Trade policy
Tariff · Trade agreement Finance Financial market
Financial market participants
Corporate · Personal
Public · Regulation Banking Fractional-reserve
Full-reserve · Free banking
Islamic
view • talk • edit • project
A budget deficit occurs when an entity (often a government) spends more money than it takes in. The opposite of a budget deficit is a budget surplus. Debt is essentially an accumulated flow of deficits. In other words, a deficit is a flow and debt is a stock.
An accumulated deficit over several years (or centuries) is referred to as the government debt. Government debt is usually financed by borrowing, although if a government's debt is denominated in its own currency it can print new currency to pay debts. Monetizing debts, however, can cause rapid inflation if done on a large scale. Governments can also sell assets to pay off debt. Most governments finance their debts by issuing long-term government bonds or shorter term notes and bills. Many governments use auctions to sell government bonds.
Governments usually must pay interest on what they have borrowed. Governments reduce debt when their revenues exceed their current expenditures and interest costs. Otherwise, government debt increases, requiring the issue of new government bonds or other means of financing debt, such as asset sales.
According to Keynesian economic theories, running a fiscal deficit and increasing government debt can stimulate economic activity when a country's output (GDP) is below its potential output. When an economy is running near or at its potential level of output, fiscal deficits can cause inflation.
BLOOMBERG: Democrats Split on Stimulus as Job Losses Mount, Deficit Soars. Well, the whole deficit?
BLOOMBERG: Democrats Split on Stimulus as Job Losses Mount, Deficit Soars. Well, the whole deficit-soaring thing is no surprise...
ANOTHER GRIM MILESTONE: Budget deficit tops $1 trillion for first time. ?The federal deficit has t?
ANOTHER GRIM MILESTONE: Budget deficit tops $1 trillion for first time. “The federal deficit has topped $1 trillion for the first time ever and could grow to nearly $2 trillion by this fall, intensifying fears about higher interest rates, inflation and the strength of the dollar...
U.S. DEFICIT climbs to 1.3 trillion dollars. ?The deficit for the first 10 months of fiscal year 20?
U.S. DEFICIT climbs to 1.3 trillion dollars. “The deficit for the first 10 months of fiscal year 2009, which began October 1, reached 1...
MORE ON THE OBAMA DEFICIT:
The White House raised the 2009 budget deficit projection to a stagger?
MORE ON THE OBAMA DEFICIT:
The White House raised the 2009 budget deficit projection to a staggering $1.8 trillion today...
MEGAN MCARDLE ON THE DEFICIT BLAME GAME:
How is a $118 billion structural deficit, $35 billion in?
MEGAN MCARDLE ON THE DEFICIT BLAME GAME:
How is a $118 billion structural deficit, $35 billion in Medicare Part D, and a theoretical end to the Iraq presence forcing Barack Obama to spend nearly $1 trillion in 2018? How is it forcing him to spend roughly $650 trillion more than he takes in in 2012? [...
Bernanke: Cut the Deficit
"ertainly, our economy and financial markets face extraordinary near-term challenges, and strong and timely actions to respond to those challenges are necessary and appropriate...
















