Within the budgetary process, deficit spending is the amount by which spending exceeds revenue over a particular period of time, also called simply deficit, or budget deficit, the opposite of budget surplus. The term may be applied to the budget of a government, private company, or individual.
When did deficit spending start?
The unbroken sequence of unbalanced budgets that operated from fiscal year 1931 to fiscal year 1947 heralded the predominance of deficit budgets in the second half of the twentieth century. Source for information on Deficit Spending: Encyclopedia of the Great Depression dictionary.
How does deficit spending affect economic growth?
Deficit spending involves a government spending more than it collects in revenue. John Maynard Keynes introduced deficit spending as an economic stimulus during economic downturns. The multiplier effect suggests that government spending can have a greater impact on economic growth.
