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The Difference between Debt and Deficit

December 10, 2010

Its actually pretty simple…

A deficit is the yearly difference between expenditures (government spending) and revenues (taxes). It is the yearly sum of money owed.

The national debt is the accumulation of annual budget deficits. It is the net (total) sum of money owed.

Note: The total national debt under George Bush II tops out at $10.6 trillion (not shown on this graph) nearly doubling from the $5.6 trillion that it stood at when he initially took office.

To see what type of spending under Bush II caused the national debt to double, click here.

To understand how a sovereign debt crisis works, click here.

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Additional Note: the numbers for the annual deficit includes any government payments towards interest on bonds (the loans) as part of annual expenditures.

2 Comments leave one →
  1. Caddy Jim permalink
    July 14, 2015 12:32 pm

    Tax Cuts Have A Benefit When Their High So Kennedy Lowering Taxes From 91% To 70% Was Good Where It Stayed & The Debt Was Less Than $1Trillion While Also Investing In The US Infrastructure NASA, The Space Race & Even The Vietnam WAR Until The 80’s Where Reagan Cut Taxes To A Meer 28% Which Had & Has Short Term Benefits Followed By Boom Bust Economy. PPL Need To Quit Comparing A Gov. Debt With House Hold Debt. PPL Cant Do A lot Of Things Gov. Can Like Print Money

    The Right Like To Complain The Left “TAX & Spends” While In Reality The Right [Cuts Taxes (On The RICH) & Spends Specially On The Military] Our Currant Debt Is From The Last 3 Rep Presidents. Besides Shown By The Great Depression Go. Investment Helps The Economy PPL Forget hats What Paid For WWll & All The Jobs But Not Only The WR But Before & After With Investments In Infrastructure (Dams, Bridges, Roads, Ect.) Would Just Add One Of Our Greatest Problems Is “INFORMATION” Many Americans Are “Uninformed” & Even Worse & Growing Are The “Misinformed” Shown By Most Not Knowing How Bad Income Inequality Is & Has Got At The Hands Of The RICH Not Seen Since The Roaring 1930’s Leading To The Great Depression.


  1. Historic Chart of U.S. Debt to GDP Ratio « floodingupeconomics

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