Fiscal Deficit

Loading the player...

What is 'Fiscal Deficit'

Fiscal deficit is when a government's total expenditures exceed the revenue that it generates (excluding money from borrowings). Deficit differs from debt, which is an accumulation of yearly deficits.

BREAKING DOWN 'Fiscal Deficit'

A fiscal deficit is regarded by some as a positive economic event. For example, economist John Maynard Keynes believed that deficits help countries climb out of economic recession. On the other hand, fiscal conservatives feel that governments should avoid deficits in favor of a balanced budget policy.

RELATED TERMS
  1. Deficit

    The amount by which a resource falls short of a mark, most often ...
  2. Budget Deficit

    A status of financial health in which expenditures exceed revenue. ...
  3. Trade Deficit

    An economic measure of a negative balance of trade in which a ...
  4. Deficit Spending

    When a government's expenditures exceed its revenues, causing ...
  5. Deficit Hawk

    Slang for someone who wants the government to keep the federal ...
  6. Deficit Spending Unit

    A economic term used to describe how an economy or economic unit ...
Related Articles
  1. Term

    What's a Deficit?

    A deficit is the amount by which expenses or costs exceed income or revenues.
  2. Economics

    Twin Deficits: Twice The Fun For The U.S

    The U.S. has been running both fiscal and current account deficits for years, but what does it all add up to?
  3. Economics

    How Budget Deficits Work

    How do governmental and business budget deficits function?
  4. Economics

    The Pros & Cons of a Trade Deficit

    Is a trade deficit, also known as a current account deficit, beneficial or detrimental to a country's economy?
  5. Economics

    Fiscal Deficit

    A shortfall that occurs when government spending exceeds government revenues, or taxes.
  6. Economics

    Current Account Deficit

    A current account deficit occurs when a country spends more money on the goods and services it imports than it receives for the goods and services it exports.
  7. Personal Finance

    You Know Debt & Deficit Are Not The Same, Right?

    An educational article explaining in detail how deficit differs from debt and how are they related.
  8. Economics

    What does Current Account mean?

    The current account reflects the difference between a country’s savings and investments.
  9. Professionals

    Currency Appreciation and Depreciation

    CFA Level 1 - Foreign Exchange Parity Relations - Influences. Learn how budget deficits can lead to trade deficits and the various causes behind currency depreciation and appreciation.
  10. Economics

    Exploring The Current Account In The Balance Of Payments

    Learn how a country's current account balance reflects the country's economic health.
RELATED FAQS
  1. Who thinks fiscal deficits are a good idea?

    Find out why nearly all political actors support the concept of governments incurring fiscal deficits, either explicitly ... Read Answer >>
  2. What is the difference between fiscal deficit and federal debt, and which is worse?

    Read about the primary differences between the federal government's fiscal deficits and its total debt, and find out which ... Read Answer >>
  3. What is the effect of a fiscal deficit on the economy?

    Take a deeper look into the real impacts of government budget deficits on the economy, and why government financing reduces ... Read Answer >>
  4. What is the difference between a current account deficit and a trade deficit?

    Learn the meanings of the macroeconomic terms current account deficit and trade deficit, and understand the differences between ... Read Answer >>
  5. Is there any limit on fiscal deficits at the federal level?

    Discover the legal, theoretical, practical and political limitations imposed on the fiscal deficits accumulated by the U.S. ... Read Answer >>
  6. Which countries run the largest budget deficits?

    Discover the countries with the largest budget deficits and what it means. Deficits are influenced by the economy and also ... Read Answer >>
Hot Definitions
  1. Goodwill

    An account that can be found in the assets portion of a company's balance sheet. Goodwill can often arise when one company ...
  2. Return On Invested Capital - ROIC

    A calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ...
  3. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  4. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  5. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  6. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
Trading Center