deficit spending


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

Neither Republican congressional leaders — who railed against President Obama's deficit spending — nor President Trump, who once vowed to balance the budget, had any immediate comment on the report. Cathleen Decker,, "Budget office projects growing deficits and massive debt during Trump administration," 9 Apr. 2018 If anything, in fact, Trump’s policies — namely, the $1.5 trillion tax cut and increase in deficit spending — might be pushing the Fed to act more aggressively. Emily Stewart, Vox, "Trump’s beef with the Fed, explained," 29 Nov. 2018 Paul has waged a lengthy battle against federal deficit spending — triggering a brief government shutdown in February by holding up a spending bill vote from the Senate floor. Morgan Lee, The Seattle Times, "Sen. Rand Paul backs Libertarian candidate in New Mexico," 28 Aug. 2018 Lopez Obrador says his program can be funded without deficit spending, with the money saved by eliminating graft. Bloomberg, Fortune, "What You Need to Know About the Historic Victory of Mexico's New Left-Wing President," 2 July 2018 Another concern is that the huge corporate tax cut, and ensuing deficit spending, has taken away a key stimulus opportunity that could have been used to re-energize the economy. Phillip Molnar,, "Is a flattening yield curve a sign of a coming recession?," 6 July 2018 But for those precious few yearning to return to the days of nonstop tax increases, deficit spending and massive job losses then Martin O’Malley has done them a favor by endorsing Rushern Baker. Doug Donovan,, "Rushern Baker unleashes O'Malley on Gov. Hogan in Democratic campaign for Maryland governor," 21 June 2018 And his rant proved potent among conservatives who reacted much more aggressively to Obama’s health care plan than to, say, Bush’s massive deficit spending. Jane Coaston, Vox, "In 2018, the Tea Party is all in for Trump," 15 May 2018 Berri, the sports economist, sees other reasons for rosy forecasts and deficit spending in college sports. Christopher Schnaars, USA TODAY, "Is overspending catching up to these Power 5 schools?," 28 June 2018

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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Statistics for deficit spending

Last Updated

19 Feb 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


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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