deficit spending

noun

Definition of deficit spending

: the spending of public funds raised by borrowing rather than by taxation

Examples of deficit spending in a Sentence

Recent Examples on the Web

And when Democrats skipped pension payments for two years after that, and borrowed repeatedly to paper over deficit spending, Republicans should have said, hell no. Kristen Mcqueary, chicagotribune.com, "Column: In deadbeat Illinois, where was Republican outrage over fiscal insanity?," 9 Sep. 2019 But Trump has been largely dismissive of deficit spending as a political issue, instead offering a message about national identity and racial and cultural grievances that the Republican base has heartily embraced. Alexander Burns, BostonGlobe.com, "Mark Sanford will challenge Trump in Republican primary," 8 Sep. 2019 For example, it can be invoked if a district is on the verge of insolvency or if a district could be pushed into deficit spending by a new charter. Howard Blumestaff Writer, Los Angeles Times, "Charter school compromise could intensify L.A.'s school board battles," 3 Sep. 2019 The spending plan, which was adopted by the school board last week, also anticipates deficit spending of $900,000 in 2020-21 and $1.1 million in 2021-22, when the district’s reserve fund for economic uncertainties will drop to about $1.2 million. David Hernandez, San Diego Union-Tribune, "San Ysidro School District anticipates deficit spending in upcoming year," 18 June 2019 Instead, as budgets increasingly roll into deficit spending, policymakers can promote large defense budgets and wage perpetual war without raising taxes or demanding financial sacrifices. Rebecca U. Thorpe, The Conversation, "One budget line Congress can agree on: Spending billions on the US military," 14 Aug. 2019 The district’s governing board should act immediately to balance the budget, respond to declining enrollment trends and reduce the forecasted deficit spending. Deborah Sullivan Brennan, San Diego Union-Tribune, "Oceanside schools face fiscal crisis," 26 July 2019 Such complaints at least serve to check runaway deficit spending. Jonah Goldberg, National Review, "Unity Can Be Worse than Partisanship," 26 July 2019 Republicans pretended great concern about the deficit, then two years ago passed a budget-busting tax cut, and now enable yet more deficit spending. The Washington Post, Twin Cities, "Other voices: The fate of the Cadillac tax should be a wake-up call," 28 July 2019

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'deficit spending.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of deficit spending

1938, in the meaning defined above

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Last Updated

17 Sep 2019

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The first known use of deficit spending was in 1938

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More Definitions for deficit spending

deficit spending

noun

Financial Definition of deficit spending

What It Is

Deficit spending is spending that reduces or offsets a surplus. In the business world, the term often refers to situations where expenses exceed revenues, imports exceed exports or liabilities exceed assets.

How It Works

Deficit spending creates fiscal deficits and trade deficits.

Fiscal deficits occur when a government's expenditures exceed its revenue. A government usually borrows money (by issuing Treasury securities or similar instruments) to fill the gap or "fund the deficit."

Trade deficits (also called current account deficits) occur when a country imports more than it exports.

Why It Matters

Deficit spending is controversial. The famous economist John Maynard Keynes argued that it stimulated economies by giving governments the money to purchase goods and services and were thus particularly useful for getting countries out of recessions. However, many scholars also argue that governments should not engage in deficit spending regularly because the mountain of debt they create makes for unsustainable economies in the long run.

Source: Investing Answers

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