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What is the Deficit? The federal government deficit is the current gap between the money brought in as revenue and the money going out as spending. The federal government debt is the cumulative amount of money borrowed. You probably have to incur debt to cover a deficit, but a deficit can be temporary while a debt may stick around for a while.
Definition of Deficit and Debt. 1  Deficit relies to the annual borrowing requirement of the government. (often referred to as budget deficit) 2  Debt related to the total level of public sector debt built over previous years. (often referred to as national debt) 3  In 2010/11 UK public sector deficit is forecast to be around Â£149bn of or 12% of GDP.