In 3-5 sentences, analyze the relationship between the federal budget and national debt. Explain how a federal budget deficit and a federal budget surplus influence levels of national debt.
The federal budget and national debt are linked as the federal budget reflects the government's intended revenue and spending, while the national debt is the accumulation of past budget deficits and surpluses. A federal budget deficit occurs when the government spends more than it collects in revenue, and this deficit contributes to the national debt. On the other hand, a federal budget surplus means the government collects more in revenue than it spends, which can help reduce the national debt.
