Budget Deficits and National Debt

Every year the federal government balances spending and revenue; when spending exceeds receipts, the result is a budget deficit, and repeated deficits accumulate into the national debt. For a clear, plain‑language explanation of how deficits arise, see how deficits happen when government spending exceeds revenue, and for the distinctions among deficits, surpluses, and debt, read how deficits, surpluses, and debt relate to each other.

Why it matters

Rising debt changes the federal budget: interest costs grow, limiting funds for other priorities and influencing policy choices. For current figures and context, consult the latest on the U.S. national debt and consider possible policy responses in potential solutions to the national debt crisis.

Options and trade‑offs

Policymakers can pursue balanced budgets, surpluses, tax changes, or spending reforms—each with different economic effects. Explore what a balanced budget would mean at what is a balanced budget and the debate over requiring one at should the U.S. be required to balance its budget.