What does a government experience when it spends more than it receives during a year?

When a government spends more than it receives in revenue over a specific period, typically a fiscal year, it experiences a budget deficit. A budget deficit occurs when expenditures exceed revenues, requiring the government to borrow funds or use other financial instruments to cover the shortfall. This situation indicates that the government is operating at a financial loss for that year.

In contrast, a budget surplus arises when revenues exceed expenditures, allowing the government to save money or pay down existing debt. A balanced budget would mean that expenditures equal revenues, leaving no surplus or deficit. Therefore, only the concept of a budget deficit accurately describes the financial condition of a government spending beyond its means in the year in question.