Glossary Terms:

The Role of Government: The National Debt vs. The Deficit

Glossary terms from:


Monetary or non-monetary gain received because of an action taken or a decision made.


A spending-and-savings plan, based on estimated income and expenses for an individual or an organization, covering a specific time period.

Budget Deficit

Refers to national budgets; occurs when government spending is greater than government income in a given year. A yearly deficit adds to the public debt.


Money owed to someone else. Also the state or condition of owing money. Can be individual, corporate or government debt.

Federal Budget

The taxing and spending plan of the national government.

Government Revenues

Funds raised through taxing and borrowing to pay for government expenditures.

Government Spending

Spending by all levels of government on goods and services; includes categories like military, schools and roads.


Money paid regularly, at a particular rate, for the use of borrowed money.


A federal health-care program that pays for certain medical and hospital costs for people aged 65 and older (and for some people who are under the age of 65 and disabled). Part of Social Security.


Anything that is generally accepted as final payment for goods and services; serves as a medium of exchange, a store of value and a standard of value. Characteristics of money are portability, stability in value, uniformity, durability and acceptance.

National Debt

The total amount owed by the national government to those from whom it has borrowed to finance the accumulated difference between annual budget deficits and annual budget surpluses; also called public debt.

Social Security

A federal system of old-age, survivors', disability and hospital care (Medicare) insurance which requires employers to withhold (or transfer) wages from employees' paychecks and deposit that money in designated accounts.


The situation that results when the quantity supplied of a product exceeds the quantity demanded. Generally happens because the price of the product is above the market equilibrium price.