A budget deficit occurs when a country spends more on government programs than the revenue it takes in from taxes, fees, and tariffs. If the government’s income is greater than its spending, then it is said to be running a budget surplus.
At the beginning of the new millennium, the U.S. ran a budget surplus of $236.4 billion in 2000 and $127.3 billion in 2001. Since then, the U.S. has run a budget deficit, which ballooned after the country fell into a recession at the end of 2007.
In 2007, the country ran a budget deficit of just $161 billion; by 2008, it had swelled to $459 billion. Between 2009 and 2012, the U.S. reported annual budget deficits in excess of $1.0 trillion.
The U.S. budget deficit began to narrow in 2011 as the economy started to recover. In 2011, the U.S. budget deficit stood at $1.29 trillion. At $483.35 billion, the 2014 budget deficit will be at the lowest levels since 2008, but it will be short lived; the Federal Government forecasts the 2015 budget deficit to be $564 billion.
The U.S. expects to run a budget deficit until 2024. Still, as the budget deficit shrinks, the U.S. national debt continues to climb, from $9.2 trillion in 2009 to approximately $18.0 trillion in 2014.