Which term describes a situation where a government spends more than it collects in taxes?

The term that describes a situation where a government spends more than it collects in taxes is "deficit." A deficit occurs when the government's expenditures exceed its revenues during a specific period, indicating that the government is borrowing money to cover its spending. This typically results in an increased national debt over time, as the government must finance the deficit either through borrowing or creating more currency.

In contrast, a surplus refers to the situation where government revenues exceed its expenditures, allowing for reinvestment, savings, or debt repayment. Debt refers to the total accumulated borrowings that a government has incurred, often resulting from ongoing deficits. A balanced budget occurs when a government's revenues are equal to its expenditures, meaning it does not run a deficit or a surplus. Thus, a deficit specifically indicates that spending has outpaced income.