Definition
- National debt
- The national debt is the total amount that the government has borrowed over time and has not yet repaid.
- Not to be confused with: Budget deficit
- The budget deficit is the amount by which government spending exceeds tax revenue over one year, and so what the government borrows in that year.
Test yourself
What is the difference between national debt and budget deficit?
The deficit is one year of borrowing, a flow; the debt is the total still owed, a stock.