The excess of a government’s total expenditure over its income. This has to be met by borrowing, which increases government debt. Budget deficits can be calculated for any level of government—central, local, state in federal countries such as Germany or the United States—or for general government, which is all these levels combined. It is important to distinguish whether the deficit is calculated including as expenditure the nominal or the real interest on government debt: conventional measures of the budget deficit use nominal interest, but an inflation-adjusted budget deficit would include real interest only. The cyclically adjusted budget deficit is what the budget deficit would be if the existing tax and spending rules were maintained but national income rose or fell to its normal level; this can only be estimated.