What is the difference between Debt and Deficit? - ProProfs Discuss
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What is the difference between Debt and Deficit?

Asked by K. Tanaka, Last updated: Mar 24, 2022

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2 Answers

Malcolm Carneal

Malcolm Carneal

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Malcolm Carneal
Malcolm Carneal, Digital Nomad, MCA, Vienna

Answered Jun 27, 2019

Although the word debt and deficit are related, they are certainly not the same. Debt is the state or condition of owing something. It also represents the accumulation of past deficit. The more you borrow, the more your debt grows.

Although the word debt and deficit are related, they are certainly not the same. Debt is the state
Deficit is a situation whereby the spending exceeds the Government revenue. It is the annual difference between spending and revenue. When the Government saves more than it spends, it is considered as surplus. When in deficit, people borrow more in order to stay afloat. Example of this is the credit card debt, which in turn, increases the debt.

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Christopher Leippi

Christopher Leippi

Christopher Leippi
Christopher Leippi

Replied on Jan 29, 2021


there is the sectoral balance graph. If you look very carefully at all three sectors Government, Private, and the rest of the world- all must balance out to zero. the government deficit spends, that is they spent more into the economy than they tax back then the government will have a deficit and the private sector will have the = amount of surplus ex. gov't spends $ 1000.00 into the economy and taxes back $ 600.00= a gov't deficit os -$400.00 and a private sector surplus of $ 400.00 If

Barry Mclean

Barry Mclean

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Barry Mclean
Barry Mclean, Sales Manager, MBA, Ewa

Answered Jun 10, 2019

The deficit is the term used for what the government receives from the taxes that taxpayers pay. This may be dependent on the amount of money that will also be spent by the individual. Debt is different. This is the acquired amount that a person has to pay to another person or a company. There are some people who may have acquired a lot of debt over the past months or years because they are trying to live a lavish lifestyle.

The deficit is the term used for what the government receives from the taxes that taxpayers pay.
This is not recommended because when you live beyond your means, you are bound to suffer after. Debt and deficit may affect each other in different ways. Remember that the interest of your debt may be added to your deficit every year.

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