The best way to define the difference between a debt and a deficit, is to first try to understand the meaning of a deficit

The best way to define the difference between a debt and a deficit, is to first try to understand the meaning of a deficit

The best way to define the difference between a debt and a deficit, is to first try to understand the meaning of a deficit. According to research a deficit is what is “taken in from taxes and other revenues, called receipts, and the amount of money it spends “(AARP, 2018 ), and these items are called off-budget. Now on the other hand research states that all a debt is an accumulation of deficit plus accumulated off- budget surpluses (AARP, 2018 ). It is noted that financial planning can play a role in the outcome of a deficit or a debt.

An example of debt is how the U.S .owes approximately $21 trillion as of 3/2018. 2/3 is to buyers of U.S. Treasury Bills, bonds and notes (individuals. companies, and foreign governments). 1/3 of it is from intragovernmental debt (Amadeo,2018). An example of a deficit is the proposed FY 2018-19 budget that President Trump released in Feb. 2018. It is shown in this budget that the Federal Government is borrowing/spending money beyond what is available in a budget. Of course we know it is left up to Congress to approve this proposed budget, however it portrays a good example of the U.S. deficit.

In my opinion the National Debt got big due to the accumulation of all outstanding debt owed by the Federal government. As of March 15,2018 the National Debt exceeds $21 trillion, in which as mentioned 2/3 is debt held by the public. And the remaining 1/3 is debt the treasury owes to different departments who have government account securities. Social Security is one of the biggest owners along with other trusted funds(Amadeo,2018).

References

AARP (2018). What’s the Difference Between the Debt and Deficit?-AARP. Retrieved from https://www.aarp.org>faqs>whats-the…

Amadeo, Kimberly (2018). National Debt- The Balance (The U.S. Debt and How It Got So Big). Retrieved from https://www.thebalance.com>the-u-s-de…

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 Hi, I like your post. Indeed the best way to describe differences between terms is to first define each one of them. A deficit refers to the difference between receipts (tax collections and other revenues) and outlays (what is spent). Deficits can be on-budget or off-budget. The sum of accumulated deficits ……………….

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