A deficit can be any type of negative gap between two benchmarks. A basketball team could have a deficit of 10 points if they're down 80-70 in the fourth quarter, or you could have a personal budget deficit of $1,000 if you're bringing home $5,000 per month but spending $6,000. Oftentimes, however, the term deficit applies to governments, such as with trade deficits between two countries or budget deficits when spending outpaces tax and other revenue sources. While a deficit implies a shortfall, you shouldn't assume that all deficits are bad or that a large deficit is automatically worse than a small deficit. Much depends on the context. And, when referring to government deficits, politics can play a role in terms of how people view the impact of deficits.