Definition

1. Noun:
   • Government spending financed by borrowing: "Deficit spending" refers to a government's policy of spending more money than it collects in revenue, with the difference covered by borrowing. This practice is often used to stimulate economic activity, especially during recessions or periods of high unemployment.

Usage Examples

• Noun:
  • The government resorted to deficit spending to fund the new infrastructure projects.
  • Economists debated the long-term effects of sustained deficit spending on national debt.

Advanced Usage

• "to engage in deficit spending": to actively implement a policy of spending borrowed money.
  • The administration decided to engage in deficit spending to combat the economic downturn.

Variants and Related Words

• Deficit (n): The amount by which something, especially a sum of money, is too small; a shortfall. In this context, it is the gap between government spending and revenue.
  • The budget deficit widened this quarter.
• Fiscal stimulus (n): Government spending or tax cuts intended to stimulate economic growth, often involving deficit spending.
  • The fiscal stimulus package was financed through deficit spending.

Synonyms

• Compensatory spending: Spending intended to compensate for a lack in private economic activity.
• Pump priming: Government investment designed to stimulate the economy.

Related Phrases

• Run a deficit: To operate with expenditures exceeding income.
  • The country has had to run a deficit for several years.
• Finance a deficit: To provide the funds (often through borrowing) to cover a shortfall.
  • The treasury issued bonds to finance the deficit.

Related Idioms

• Spend one's way out of a recession: An idiom describing the policy of using increased government spending, often deficit spending, to stimulate economic recovery.
  • Some policymakers advocate that we must spend our way out of a recession.

Noun

1. spending money raised by borrowing; used by governments to stimulate their economy