Definition of deficit spending
: the spending of public funds raised by borrowing rather than by taxation
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Recent Examples of deficit spending from the Web
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The amendment would ban deficit spending, require that spending not exceed 20 percent of gross domestic product, and require a majority to increase taxes and three-fifths majorities to raise the debt limit.
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John Maynard Keynes, perhaps the most influential economist of the 20th century, championed deficit spending during recessions to boost aggregate demand.
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Tax cuts for the rich funded by deficit spending are unpopular — but ones funded by slashing grandma’s Social Security check is an invitation to guillotines.
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After years of deficit spending, Lincoln-Way has been on the state's financial watch since 2015, and coupled with declining enrollment was forced to close Lincoln-Way North High School in June 2016.
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Taxes and debt: For years Republicans claimed the high ground on deficit spending.
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The Conservatives were believed to have excellent chances of unseating the Liberals, who have held power in the province since 2003, but have been embroiled in scandals and criticized for deficit spending.
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The deficit spending raised eyebrows at Akron City Council this week.
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The vote also reflects the changing politics of deficit spending.
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.
First Known Use of deficit spending
1938
Financial Definition of DEFICIT SPENDING
deficit spending
What It Is
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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