A budget deficit happens when a government spends more money than it gets.
Think of it like this: Imagine you have a monthly allowance, but you end up spending more than what you receive.
Why Should We Care?
Economic Impact: When the government keeps running deficits, it can lead to more national debt. This can affect how much money the government has to spend in the future.
Interest Rates: If the government has high deficits, it might cause interest rates to go up. That means borrowing money can become more expensive for everyone.
Essential Services: Budget deficits can limit the money available for important public services, like schools and hospitals.
For example, if a government spends 800,000, it has a deficit of $200,000. This situation can affect all of us!
A budget deficit happens when a government spends more money than it gets.
Think of it like this: Imagine you have a monthly allowance, but you end up spending more than what you receive.
Why Should We Care?
Economic Impact: When the government keeps running deficits, it can lead to more national debt. This can affect how much money the government has to spend in the future.
Interest Rates: If the government has high deficits, it might cause interest rates to go up. That means borrowing money can become more expensive for everyone.
Essential Services: Budget deficits can limit the money available for important public services, like schools and hospitals.
For example, if a government spends 800,000, it has a deficit of $200,000. This situation can affect all of us!