WHat does it mean to not carry a deficit?
How can a state government simply ignore the deficit created that year and not allow it to continue into the next year. NOTE ** deficit is not debt, im not talking about debt.**
- 10 years agoFavorite Answer
Debt and deficit are interrelated. But to carry a deficit or to run a deficit is where there is a budgetary shortfall in one fiscal year. To run/carry a deficit is to spend more than you take in. If you you do not carry/run a deficit you either are carrying a surplus (saving some taxpayer money) or running a balanced budget, which is purely spending the same amount that you took in.
If you do not carry a deficit, run a surplus, and have a debt the logical conclusion is to begin paying down the debt (paying both interest and towards the principle). If you run a balanced budget then you have spent the same as you took in and part of that spending covered the interest payment on your debt if you have any.
- ?Lv 710 years ago
They can't ignore it. It is an obligation that must be paid from current budget even if all they pay is the interest. I live in a county that does not carry a deficit. Means the county only spends what cash it has. We do not borrow nor take on debt.