Deficit vs. Debt
The deficit typically refers to the current financial period and relates to a shortfall in revenues when compared to expenses. In a government context, more is being paid out than is being collected in taxes. Any shortfall has to be funded somehow, so an organization will pay this deficit out of assets it already has or by incurring more debt.
The debt typically refers to the total outstanding liabilities of a government, or corporation.
Being in a debt position or incurring a deficit is not necessarily a bad thing, governments and organizations sometimes need to spend more in a current period than they have on hand. The issue comes from consistently being in a deficit position and building up your debt to the point where your interest payments become unsustainable. As the financial crisis has played out, numerous countries have needed bail outs and support because they could not even pay the interest on their debt. So as you can see above, deficit vs. debt really becomes deficit and debt as one leads to another.
By Jeffrey Glen