deficit financing


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deficit financing

The sale of debt securities in order to finance expenditures that are in excess of income. Generally, deficit financing is applied to government finance because income, represented by tax revenues and fees, is often unavailable to pay expenses. As with monetizing the debt, deficit financing puts upward pressure on interest rates because government debt securities compete with private securities for limited capital.

deficit financing

see BUDGET DEFICIT, PUBLIC SECTOR BORROWING REQUIREMENT.
References in periodicals archive ?
But S&P thinks that the dynamics underpinning Sukuk issuance will ref lect governments' willingness to maintain existing investment projects, rather than pure deficit financing, because issuing Sukuk necessitates an underlying asset under Shari'ah principles.
In October 2009, the Commission found that the disputed deficit financing met the criteria of the relevant EU SGEI rules.
He seems unable to comprehend that the change in public opinion toward deficit financing was not some purely ideological shift of the Zeitgeist.
In announcing his plan, the mayor emphasized that deficit financing was a one-time event necessitated by the extraordinary circumstances related to the events of September 11.
It is not compatible with prudence at all - the last thing the state wants to do is return to the deficit financing of the 1980s.
If there is no unemployment, there's less strain on the budget, and, thus, there's less of a need for deficit financing.
As with the political demand for spending, the marginal costs of any absolute level of tax and deficit financing can be expected to change (typically decrease) as national income increases, so it is again convenient to relate these marginal costs to revenue raised as a percentage of national income.
There seems to be no real, practical answer to the pressing problem of deficit financing, said Henry Schleiff, formerly a top executive at Viacom and now an independent producer for the company.
Nonetheless, an important reason for the rise in intermediate- and long-term interest rates since early January had been the apparently worsening outlook for federal deficit financing over the course of the next several years.
borrowing from other countries and international institutions like IMF (International Monetary Fund) and deficit financing.
The revision to Stable Outlook reflects the city's anticipated successful refinancing of its deficit financing bond anticipation notes (BANs) and progress towards future fiscal stability through prudent management actions.
The approved FY 2014 budget included $9,770 million in expenses and estimated net revenues of $9,525 million from the General Fund, plus $245 million in deficit financing, with debt refinancing of $575 million, for a deficit of $820 million.