deficit spending
Government borrows more
Deficit spending is government expenditure that exceeds revenue, with the shortfall covered by borrowing.
The practice is associated with Keynesian economics, which holds that governments should spend beyond their means during recessions to stimulate demand: The administration embraced deficit spending to combat the downturn.
Critics argue it burdens future generations with debt.
When one thing excludes another
- inflationSustained price level increase
- balanced budget amendmentConstitutional spending limit mandate
- debt trapSelf-perpetuating financial burden
- unsustainableCannot be maintained indefinitely
moral hazard · fiscal conservatives · future generations · pork barrel · fiscal cliff · credit downgrade
Temporary taking of another's
- creditorsThose owed payment
- interestAttention, stake, or fee
- repaymentGiving back what's owed
- loanBorrowed money repaid later
liabilities · default · bondholders · leverage · principal · indebtedness · obligation · arrears
State spending and taxation
- KeynesianPro-intervention economic theory
- expansionaryPromoting increase in size
- budget shortfallInsufficient funds for expenditures
- public expenditureGovernment's financial outlays
fiscal stimulus · appropriations · federal budget · tax revenue · fiscal year · entitlement programs · balanced budget · fiscal responsibility
Spending to stimulate economy
- multiplier effectHow spending compounds economically
- injectionSyringe-delivered dose
- public worksGovernment-built community structures
- infrastructureBasic physical systems
job creation · economic stimulus · accelerator · New Deal · quantitative easing · shovel-ready · bailout · tax cuts
Economic decline period
- unemploymentBeing without paid work
- contractionReduction in size
- depressionProlonged low state
- slowdownReduction in pace
stagflation · deflation · slump · crisis · safety net · countercyclical · economic recovery · stabilization
crowding out
When one thing excludes another
- inflationSustained price level increase
- balanced budget amendmentConstitutional spending limit mandate
- debt trapSelf-perpetuating financial burden
unsustainable · moral hazard · fiscal conservatives · future generations · pork barrel · fiscal cliff · credit downgrade
borrowing
Temporary taking of another's
loan · liabilities · default · bondholders · leverage · principal · indebtedness · obligation · arrears · amortization
fiscal policy
State spending and taxation
- KeynesianPro-intervention economic theory
- expansionaryPromoting increase in size
- budget shortfallInsufficient funds for expenditures
public expenditure · fiscal stimulus · appropriations · federal budget · tax revenue · fiscal year · entitlement programs · balanced budget · fiscal responsibility · supply-side
pump-priming
Spending to stimulate economy
- multiplier effectHow spending compounds economically
- injectionSyringe-delivered dose
- public worksGovernment-built community structures
infrastructure · job creation · economic stimulus · accelerator · New Deal · quantitative easing · shovel-ready · bailout · tax cuts · rebates
downturn
Economic decline period
- unemploymentBeing without paid work
- contractionReduction in size
- depressionProlonged low state
slowdown · stagflation · deflation · slump · crisis · safety net · countercyclical · economic recovery · stabilization
- economicssupply and demand, inflation, GDP, GNP, gross domestic product
- economic historystock market crash, Industrial Revolution, trade routes, Great Depression, gold standard
- economic policymonetary policy, tax policy, fiscal discipline, fiscal stimulus, fiscal restraint
- 1980s AmericaRonald Reagan, Reagan, Iran-Contra, Contras, Sandinistas
- budget termsbudget, surplus, revenue, expenditure, outlay
- economic stimulusstimulus, stimulus package, stimulus packages, fiscal stimulus, economic relief
deficit spendingbudget surplus
Revenue exceeding outlays
balanced budget · fiscal surplus · budget balance · paying down debt · fiscal responsibility
deficit spendingausterity
Enforced economic stringency
fiscal austerity · spending cuts · fiscal conservatism · belt-tightening · retrenchment
deficit spendingdebt reduction
Decreasing money owed
paying down debt · debt repayment · deleveraging · solvency · fiscal responsibility