A budget deficit occurs when an entity (often a government) spends more money than it takes in. The opposite is a budget surplus.

This entry only concerns the government's deficits. These are important political issues. "Starve-the-beast" strategies usually lead to high budget deficits. Others, fiscal conservatives denounce deficit spending and advocate balanced budgets. Keynesians argue that under some circumstances, deficit spending is justified.

Note that the deficit is distinct from the government's debt (often confusingly called the national debt or public debt), which results from an accumulated deficit across a number of years. Often, a certain part of spending is dedicated to paying of debt with certain maturity, which can be refinanced by issuing new bonds. That is, a fiscal deficit leads to an increase in an entity's debt to others.