A budget surplus is when extra money is left over in a budget after expenses are paid. A budget deficit occurs when the federal government spends more money that it collects in revenue. ... The ways the federal government collects and spends money reflect many economic goals.

What is the meaning of surplus and deficit?

Definition. A surplus is an amount of a resource or asset that exceeds the utilized portion. On the other hand, a deficit is a situation whereby a required resource, especially money, is less than what is required, hence expenses exceed revenues.

What is the difference between a surplus and a deficit?

The deficit is the annual difference between government spending and government revenue. ... If the government spends more than it takes in, then it runs a deficit. If the government takes in more than it spends, it runs a surplus.