A budget deficit occurs when the expenses or spending of a person, organization, or government exceed the amount of money they have available. This leads to a financial shortfall, where the outflow of funds surpasses the inflow. In the case of a government, a budget deficit happens when it needs to borrow money to cover the gap between its spending and its revenue from taxes and other sources.
Budget deficits can have effects like increasing debt and interest payments, potentially affecting economic stability and financial planning.
