Economics explained: the deficit and the debt | Guardian Explainers

Deficit is a word that has haunted western economies since the financial crisis of 2008, but what is it?
Why does it get so often confused with debt? And how important is it to the running of an economy? Economists still argue over how best to eliminate it - either by stimulus or by austerity, but one thing is certain: the deficit is set to dominate economic and political discussion for years to come.

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[jack]

the ending was perfect, this is exactly what our debt is like now. The conservatives have halved the deficit but doubled the debt in the process, making it useless

[beatme]

So whats the difference between debt and deficit of a nation ?

[jameslovering]

(Austerity) To present this as a viable theory is rubbish. Its clearly been proven to be extremely harmful and thats also quite obvious to anyone who takes 5 minutes to think of it. Deficits are a normal functioning part of an economy, when an economy is not creating enough aggregate demand then running a deficit is required to fill the gap.

[haitianrefugee]

I really enjoyed the Exxonmobile commercial before the video more than the story itself. Funny how they forgot to mention interest on debt & how liberals/regressives always like deficits even when times are good.

[Dagganon]

really.... debt is caused by borrowing whomever made this video needs to be fired, find someone who will make a decent video on the UK debt and the conflicting arguments instead of spoon feeding people what they already know... this is video reflects very badly on guardian standards....