What is the difference between a government's deficit and the national debt?

A deficit is the gap in one year between what a government spends and what it collects. The national debt is the running total of everything it has borrowed and not yet paid back. Think of a bathtub: the deficit is the tap pouring in new water this year, and the debt is the water already in the tub. Running a deficit adds to the debt, and a surplus, when revenue exceeds spending, would let the level fall.

The official UK numbers show the difference. The national debt is a stock measure: how much is owed at one moment. The deficit measures borrowing over a period. In official statistics the national debt is usually reported as public sector net debt excluding public sector banks, and at the end of November 2025 it was provisionally estimated at 2,927.7 billion pounds, equal to 95.6 percent of GDP. In 2017 alone, the government's deficit added 46 billion pounds to it. In the US, the same logic: the budget typically spends more than it collects, and the difference adds to the federal debt each year. According to one source, the US federal deficit in fiscal year 2025 was 1,775 billion dollars, or 5.8 percent of GDP.

Debt is usually compared with the size of the economy, because GDP measures what a country produces in a year. That is why you will hear debt quoted as a percentage of GDP.

Why borrow at all? The source says debt can let governments conduct fiscal policy more effectively, avoid tax increases, and make investments with long-term returns. How much is too much is one of the most argued questions in economics.