What term is used to describe a situation where a government spends more money than it collects in taxes?

The term used to describe a situation where a government spends more money than it collects in taxes is "deficit." When a government has a budget deficit, it means that its expenditures exceed its revenues, typically reflecting increased borrowing to cover the shortfall. This can signal a need for adjustments in fiscal policy, such as increasing taxes or decreasing spending, to achieve a balanced budget in the future.

In contrast, "surplus" refers to a scenario where revenues exceed expenditures, "balance" indicates that spending and revenues are equal, and "excess" is a more general term that does not specifically refer to government finance in this context. Understanding these terms is fundamental for analyzing government fiscal health and economic conditions.