Budget Deficits and the National Debt
Budget Deficits and the National Debt
- A budget deficit is the amount by which the federal government's outlays exceed its revenue in a given year.
- The National Debt is the federal government's total indebtedness at a moment in time. It is the accumulation of previous deficits plus outstanding interest.
- The difference is the difference between flows and stocks. An analogy is to think of water filling into a pool.