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.

deficit spending

Expenditures that are in excess of revenues during a given period of time. Deficit spending is generally applied to governmental units, but the concept is equally applicable to private businesses.
References in periodicals archive ?
The critique of the Obama's deficit spending, unlike for example Roosevelt's in the 1930s, is that it is not sufficiently stimulating the economy.
Although the government's deficit spending reduced the wealth of the taxpaying public, the Keynesian illusion of general prosperity could sustain itself as long as taxpayers, like producers and consumers, remained focused on their immediate circumstances and ignorant of the bigger picture.
Republicans don't mind deficit spending if the trade-off is tax cuts and more money for the military.
By increasing its deficit spending, the government is assuming some of the burdens that the private sector might otherwise have to in order to encourage spending and investment.
Even the much-hailed John Maynard Keynes, who advocated government intervention and deficit spending as a recession antidote, would have been unlikely to approve of the type of deficit spending the US and UK are currently indulging in and advocating their Western counterparts to follow.
At this rate of deficit spending, the state would blow through the entire $15 billion lump-sum payment from this 40-year "lease" in about two years.
Deficit spending is not inherently bad public policy.
He said deficit spending by the federal government would put pressure on long-term rates, which, in turn, will drive up mortgage interest rates slightly in the first half of 2003.
The idea is that you should do deficit spending during recessions and run surpluses during periods of economic growth.
The underlying aim of the initiative is to avoid chronic deficit spending and the Federal Department of Finance advocates the initiative.
But the NRI cautioned that its forecast presumes the government has the resolve to keep up its current high-level deficit spending and that Washington will engineer a soft landing for the overheated U.
That sum doesn't cover the cost of growing government debt service after several years of heavy deficit spending in an anemic economic climate.