When a government spends more in a year than it takes in.
When the government spends more than it collects in a year, it borrows to cover the gap. The deficit is one year's shortfall; the national debt is all those shortfalls added up.
"The deficit grew this year because spending rose faster than tax revenue."
Filed under money and the economy in the glossary, with every word used on How I Lean.
Nine questions, about three minutes, and you'll see where you lean.