Difference between deficit and debt?

Is it that deficit is the difference between how much the government receives and how much it spends, and debt is the amount of money owed to other countries (or wherever they get the money from)?

2 Answers

  • 8 years ago
    Favorite Answer

    Deficit and surplus are terms to describe how much money is left at the end of a fiscal year (or other budget cycle). When there is money left over, it's a surplus. If money had to be borrowed to make it through the year, that unplanned for money is a deficit. Borrowed money rolls into national debt. It is a accumulation of deficits. In a perfect world, surpluses would pay down debt, but they usually "get lost" before reaching the treasury.

  • 5 years ago

    A deficit is a shortfall in revenue. A debt is an quantity that's owed. It is a budget term that has little if any precise fact in actual and specific math. If manufacturer a expects to make 2 monies this yr and makes three monies, that may be a surplus, in the event that they make 1 monies, that is a deficit. When corporation a buys a tractor for 8 monies and so they handiest have 6 monies, if it is lent to them or payments are accepted on a time or trade that could be a debt. When corporation a runs the tractor into a tree and it charges four monies to make it work once more, that is an UN-expected debt. When enterprise a sets aside or saves a collection amount of surplus each month for fees which can be surprising, that could be a intelligent corporation and they may be able to have enough money the tractor-tree incident. When enterprise a has a foul crop considering of floods and tractor failures, that might be a deficit, or just unhealthy trade observe. The country wide Deficit is expected to be X, then a tornado hits and it becomes XYz. The national Debt is the specific monies that we know are owed and will have to be paid. We all know that B-2 zombie attack airplane used to be going to fee 18 billion monies, then the contractor discovered an error and that went up, now we now have the zombie killers and have to preserve them flying, that is a Deficit. Deficit is like surprising Debt, sorta.

Still have questions? Get your answers by asking now.