Deficits, Debt, and Trust Funds
The difference between the federal deficit and the change in total public debt is primarily related to the treatment of the government’s trust funds. The trust funds exist to meet the future obligations of the federal government. In a very real sense, the trust fund balances do represent a debt owed to the public. From this perspective, the total outstanding debt is a more accurate measure of government liabilities and its growth over time is a more accurate measure of new borrowing than the reported deficit.