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Deficit Spending |
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Deficit spending When government spending overwhelms government revenue resulting in government borrowing. Deficit Spending A situation in which a company, or especially a government, spends more money than it collects for a given period of time, usually a quarter or a year. Companies and government finance deficit spending with borrowing; for example, the U.S. government could issue Treasury securities. Some economic theories, notably Reaganomics and Keynesian economics, minimize the importance of government deficit spending, especially during recessions. However, deficit spending adds debt, which can be detrimental in the long term. See also: national debt.
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