Fact Check: "The federal deficit is the total amount of money that the government owes."
What We Know
The claim that "the federal deficit is the total amount of money that the government owes" is misleading. The federal deficit refers specifically to the difference between the government's revenues and its expenditures during a specific period, typically a fiscal year. When the government spends more than it collects in revenue, it incurs a deficit for that year. According to the U.S. Treasury, "A budget deficit occurs when money going out (spending) exceeds money coming in (revenue) during a defined period" (U.S. Treasury Fiscal Data).
In contrast, the total amount of money that the government owes is referred to as the national debt. This debt accumulates over time as the government borrows money to cover its deficits. The national debt is described as "the total amount of outstanding borrowing by the U.S. Federal Government accumulated over the nation’s history" (Understanding the National Debt).
Analysis
The distinction between the federal deficit and the national debt is critical. The deficit is a flow measure, indicating how much more the government spends than it earns in a given year, while the national debt is a stock measure, representing the total amount owed at any point in time. The U.S. Treasury clarifies that "the deficit is the difference between the money Government takes in, called receipts, and what the Government spends, called outlays, each year" (Debt versus Deficit What’s the Difference?).
The claim conflates these two concepts, which are often confused in public discourse. Reliable sources, such as the U.S. Treasury and the Center on Budget and Policy Priorities, consistently emphasize this difference (Policy Basics: Deficits, Debt, and Interest).
While the national debt grows as a result of ongoing deficits, it also includes the total amount borrowed in previous years. The national debt is not simply the current year's deficit but rather the cumulative total of all deficits and surpluses over time. Therefore, the assertion that the deficit is the total amount owed misrepresents the financial terminology and the underlying economic principles.
Conclusion
Verdict: False. The claim that "the federal deficit is the total amount of money that the government owes" is incorrect. The federal deficit refers to the shortfall in a given fiscal year when expenditures exceed revenues, while the national debt is the total accumulation of all past deficits and surpluses. These are distinct financial concepts, and conflating them can lead to misunderstandings about the government's fiscal health.
