Principles of Macroeconomics / Unit 14 MAC 1302 short lesson, about 20 seconds
The Deficit Is Not the Debt
Captions available
The idea
The deficit is one year's gap between spending and revenue. The debt is the accumulation of every past deficit less every past surplus. One is a flow and the other is a stock.
In practice
Borrowing ten thousand a year for four years is a ten-thousand deficit and a forty-thousand debt.
Where people slip
A falling deficit still adds to the debt. Only a surplus reduces it.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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