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.
Opposition parties have threatened to delay Japan's deficit financing bill in the past but have eventually yielded and voted in favor.
It is in this light that this study sets out to evaluate the social consequences of government deficit financing in Nigeria, particularly in the years preceding the return to civil rule.
Lewis suggests that the shift away from deficit financing has been a direct result of the victory of neoliberal ideas about these issues in Ottawa, and the waning influence of Keynesian macroeconomic analysis.
By 1600 conspicuous consumption and deficit financing marked both the convent and aristocratic Milan.
Let civilian voices argue the merits or demerits of our processes of government: Whether our strength is being sapped by deficit financing indulged in too long, by Federal paternalism grown too mighty, by power groups grown too arrogant, by politics grown too corrupt, by crime grown too rampant, by morals grown too low, by taxes grown too high, by extremists grown too violent; whether our personal liberties are as thorough and complete as they should be.
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.
Deficit financing has become the buzz word of the TV industry, and the issue itself is a dominant theme among producers and distributors.
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.
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.