A budget deficit is a flow — the amount by which government spending exceeds tax revenue within a single year, which must be covered by borrowing — while national debt is the corresponding stock, the accumulated sum of past deficits; the two are therefore distinct quantities related by accumulation, and debt can only be reduced by changing spending or revenue, not by capping issuance. Because a borrower's capacity to service obligations scales with income, debt is analyzed as a ratio to GDP and in inflation-adjusted terms rather than as a nominal level, and its sustainability is judged against the growth of national output rather than against its absolute size. This belongs to macroeconomics, specifically public finance and fiscal policy, and it supplies the theoretical basis for the discipline's two principal concerns about sustained government borrowing: crowding out of private investment from a finite pool of savings, and the interest-rate/default spiral that arises when lenders lose confidence in repayment.
A budget deficit is a flow — the amount by which government spending exceeds tax revenue within a single year, which must be covered by borrowing — while national debt is the corresponding stock, the…