A budget deficit is when you are spending more than you are taking in as income. When a government incurs several years of budget deficits, it then builds a debt, which is the accumulation of the deficits. Government debt is the total amount owed by the central government, also called “national debt.” To cover shortfall between spending and income, a government will issue government bonds and bills. These are promises by the government that the money it borrows will be returned, with an interest payment as the cost of borrowing. Since all government debt is paid by income generated by the citizens of the country, this debt is really the burden of the taxpayers. In addition to outstanding securities issued by a government, it can be said that unfunded future liabilities are also considered government debt, such as future pension plans and health costs. Currently the U.S. government debt is $15.5 trillion and rising.