In economics, Fiscal Deficit (or Budget Deficit) refers to an excess of government spending over revenue. It is a measure of a government's burden on the economy. A positive balance represents a fiscal surplus (income exceeding expenditure), and a negative balance is a fiscal gap or deficit (expenditures exceeding income).The government should create a budget plan to ensure that the income of the country will cover its spending. This means that the people of the country would not be burdened because there is no money coming in. It is also important for the government to allocate its funds according to priority so that it can devote more money on improvements and developments.The US has faced a fiscal deficit since the end of World War II. In FY 1950, the fiscal deficit was 3% of GDP. Since then, it has steadily increased to a level of 5.6% in FY 2009. Fiscal deficit is measured as the difference between revenue and spending by the government.The fiscal deficit of a country is the difference between what it spends and its income. A country has to fund its expenses through taxes, borrowing and printing money. If the government spends more than it takes in from taxes, then it will have to borrow or print more money so that it can still spend as planned. This puts pressure on inflation and interest rates.
