A surplus is what is left over. In a budget, it means revenue exceeded spending. In a market, it means quantity supplied exceeded quantity demanded at the current price. In trade, it means exports exceeded imports. The word always implies an excess, but whether that excess is good or bad depends on the context.

Budget surpluses are rare for governments. The last U.S. federal surplus was in 2001, under President Clinton. Since then, deficits have been the norm. Surpluses allow governments to pay down debt, reduce taxes, or invest in new programs. But running a surplus can also slow the economy if the government withdraws more demand than the private sector creates. Keynesians warn against surpluses during recessions.

Market surpluses happen when prices are set above equilibrium. A price floor, like a minimum wage or an agricultural price support, can create a surplus of labor or crops. The surplus sits unsold, and producers may cut prices or lobby for government purchases. In competitive markets without price controls, surpluses are temporary. Prices fall, demand rises, and the surplus clears.

Surplus contexts

• Budget surplus: revenue exceeds spending
• Trade surplus: exports exceed imports
• Market surplus: supply exceeds demand
• Consumer surplus: willingness to pay exceeds price
• Producer surplus: price exceeds minimum acceptable