A budget deficit occurs when an entity spends more money than it takes in. The opposite of a budget deficit's a budget surplus. Debt's essentially an accumulated flow of deficits. In other words, a deficit's a flow, and debt's a stock. An accumulated deficit over several years (or centuries)'s referred to as the government debt. Government debt's usually financed by borrowing, although if a government's debt's denominated in its own currency it can print new currency to pay debts. Monetizing d… (More on Deficit)