Surplus
A budget surplus occurs when government revenue exceeds government spending over a defined period. A surplus can reduce the amount of debt the government needs to borrow, but it does not mean the government has no outstanding debt. The result depends on the accounting period and the measure being used.
A budget surplus occurs when government revenue exceeds government spending over a defined period. A surplus can reduce the amount of debt the government needs to borrow, but it does not mean the government has no outstanding debt. The result depends on the accounting period and the measure being used.
Example: The federal government recorded budget surpluses from fiscal years 1998 through 2001. Treasury’s historical fiscal data and the Congressional Budget Office’s budget materials distinguish a surplus from a deficit.
Common misconception: A surplus means the government has paid off all its debt. A surplus is a flow measured over a period; outstanding debt is a stock accumulated over time.
Sources: https://fiscaldata.treasury.gov/americas-finance-guide/national-deficit/; https://www.cbo.gov/topics/budget