A surplus is what is left over. In government budgets, it means revenue exceeded spending in a given period. In markets, it means supply exceeded demand at the current price. The word shows up in both contexts, and the meaning shifts with it.

Government surpluses are rare. Most countries run deficits. When a surplus occurs, governments can pay down debt, cut taxes, or invest in new programs. The choice is political. Surpluses do not last long. Spending pressures and tax cuts tend to consume them.

Market surpluses signal that prices are too high. Sellers cannot move their goods. They cut prices, which reduces supply and increases demand until the surplus clears. Agricultural surpluses are common when harvests are good or price supports are in place. Governments sometimes buy the excess to keep prices stable.

Two meanings

• Budget surplus: revenue exceeds spending
• Market surplus: supply exceeds demand
• Trade surplus: exports exceed imports
• Producer surplus: seller gains above cost
• Consumer surplus: buyer gains below willingness to pay