Definition of Surplus

What is a surplus? What is the definition of a surplus as it applies to government spending? How rare is it for a government to post a surplus?

A government can do three things over the course of a fiscal year when it comes to their budget.

1. They can post a balanced budget.

2. They can post a deficit.

3. They can post a surplus.

By far, the most common of the three is #2. Most government post deficits, which is the reason why so many countries are up to their eyeballs in debt.

What is a surplus?

It's simple.

If revenues exceed expenditures, then the government has posted a surplus.

If a government brings in $2 trillion dollars in revenues but only spends $1.6 trillion over the course of a year, then they are said to have posted a surplus of $400 billion dollars.

The opposite of a surplus is a deficit.

In case you are curious, the last time that the United States posted a budget surplus was 2001. The amount? $127.3 billion dollars.


--

Davemanuel.com Articles That Mention Surplus:

Where the Trillion Dollars of Interest on the National Debt Actually Goes

In 2001, Washington Was Worried About Paying Off the Debt Too Fast

How Long Did It Take America to Add Each Trillion of National Debt?

Sovereign Wealth Funds Worldwide - A Complete Guide to Every Major Fund

How Did Canada Double Its National Debt Over Just Ten Years?