What Is a Budget Deficit?

A budget deficit occurs when government expenses exceed revenue. It affects the national debt, borrowing, and revenue for the following year. They are caused by unanticipated events and policies and can lead to government spending cuts and tax hikes to counterbalance. The last federal budget surplus in the U.S. was in 2001, and governments can address budget deficits by promoting economic growth, reducing spending, and increasing taxes.
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