Nobody downloaded yet

Deficit spending - Research Paper Example

Comments (0) Cite this document
Summary
Deficit spending simply refers to a situation where the entire government expenditures of a particular financial year exceed the total revenue in that year. When such a case occurs, the excess needs to be financed from other sources in order to ensure smooth running of the…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER93.3% of users find it useful
Deficit spending
Read TextPreview

Extract of sample "Deficit spending"

Download file to see previous pages Government spending spurs economic growth in the country. When we focus on the long run, this is basically a positive macroeconomic effect. Government borrowing from other countries is used to finance government projects. This leads to increase in national infrastructure and stocks. This promotes the growth of the country in the long-run period. Currently, the federal government is investing heavily in education and health sectors. They can be the best gainers with the expected increased government borrowing. All these benefits associated with deficit spending can be easily estimated through analysis on cost benefit (McConnell, 1996).
Most of the Keynesian economists attribute deficit as an appropriate tool for managing the aggregate demand levels in the country. This is because increased borrowing from other countries is an economic stimulus to demand in the country. This helps to stabilize the aggregate demand. However, these economists argue that the federal government should use and implement fiscal policies to contain. Besides this, managed levels of demand helps to sustain economic growth and reduce the general level of unemployment in the country.
Deficit spending is financed through public borrowing. This leads to increase in public debt which is later financed through the revenues collected by the federal government later in future. This is a burden to the public because it implicates negatively to their lives. In most cases, taxes are raised on basic commodities for the federal government to raise revenue to cater for this.
Increase in government borrowing leads to increase in public debt in the economy. From an economist point of view, a larger public debt results into high interest levels. Hence, the citizens of that particular country will be required to pay higher taxes in order to finance this debt in long term.
Public debt is mostly financed through taxes ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Deficit spending Research Paper Example | Topics and Well Written Essays - 750 words”, n.d.)
Deficit spending Research Paper Example | Topics and Well Written Essays - 750 words. Retrieved from https://studentshare.org/macro-microeconomics/1662730-deficit-spending
(Deficit Spending Research Paper Example | Topics and Well Written Essays - 750 Words)
Deficit Spending Research Paper Example | Topics and Well Written Essays - 750 Words. https://studentshare.org/macro-microeconomics/1662730-deficit-spending.
“Deficit Spending Research Paper Example | Topics and Well Written Essays - 750 Words”, n.d. https://studentshare.org/macro-microeconomics/1662730-deficit-spending.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Deficit spending

American Spending Patterns

...s Introduction: Spending patterns often vary from individual to individual; however there are always some aspects of spending that are consistent. This consistency is usually found between similar groups of people, e.g. Young College students, young married couples, old retired people, etc. As consumers age, their spending patterns change; this change includes changes in the level of spending and the percentage allocation of spending on different items (US Dept of Labor). These changes are often triggered by major life events, some of these life events include getting a job, getting married, having children or retirement. Our analysis of...
15 Pages(3750 words)Research Paper

US government : campaign spending

...?US Government There are several reasons that it would be extremely difficult to effectively limit campaign spending and some of them shall be explained in this paragraph. The motives behind most political campaigns are to persuade voters and this is done with huge spending. Politicians seeking to be voted for need to travel across different states of the country in order to attract more voters to their candidates and they need to spend much in order to meet their target. The impression that these politicians have are that the more they spend, the more voters they have and in this case, it would be very difficult to effectively limit campaign spending. It is not possible to stop people campaigning to hold their political rallies... as it...
2 Pages(500 words)Dissertation

Public Spending

...Public Spending Table of Contents (A) Drivers that Caused the UK Public Expenditure to Increase 3 (B) Reducing Government Spending 7 References 10 The economic condition throughout the world underwent many changes during the past few decades. There have been a lot of changes in the UK economy too. The changes were made to boost the development of the economic condition of the country. There were several public investment activities that enhanced the service level and along with it there was public finance deficit (Economics Help, 2009). (A) Drivers that Caused the UK Public Expenditure to Increase The public expenditure of the UK economy has increased from the year 1900 to the end of...
5 Pages(1250 words)Essay

The level of deficit spending by the federal government

...How the Government Should Balane the Budget According to recent studies, the American government is running into greater debt and its budget deficit rising steadily. The federal government revenues are falling below a given amount, in a given financial period. The government is trying to find ways to balance the deficit that is being faced. There have been different causes for the deficit, but the main ones are the government revenues and the governments spending. A lot is being done to curb the situation, but some of the suggested ways of doing so include cutting government expenditure to match the governments revenue, raising taxes to match expected government...
3 Pages(750 words)Personal Statement

Deficit Spending

...1. Assignment Essay, Macro & Micro economics Deficit Spending Introduction Within the realms ofmacroeconomics, deficit financing is one of the turnkey variables that help in balancing the monetary flow in any modern economy neutralizing generated deficiencies. It is basically a mechanism that remains in the hands of the government of economies for curbing budgetary deficit mainly through borrowing or printing new currency. The concept of deficit financing is well adhered to mainstream Keynesian economics. This in turn stimulates the aggregate demand increasing the aggregate output and hence enhancing employment within the economy (Aryeetey, Harrigan &...
2 Pages(500 words)Essay

Government Deficit Spending

...Government deficit spending affiliation Government deficit spending Over the years, the debt rate in the United States has increased significantly. This debt is generated from the uncontrolled borrowing from the government has increased. In an argument by CBO (2012) the government has spent a lot of borrowed funds to a point that the set aside budget money intended to be borrowed cannot be accounted for. The effects of the large borrowing will be significantly felt in the future. The debt experienced by future generations would be enormous that it would take years to clear the debt as well as create a debt free budget. For this, the congress has made changes in the...
2 Pages(500 words)Research Paper

Deficit Spending

...Deficit Spending: Definition importance and application in the economy For any country, steps taken by the ruling government to control the economy is the key behind the financial success. All the nations, which are financially very strong are modifying and updating their economic policy most frequently than other nations so that they are able to tackle any unwanted circumstances. Deficit spending is also one such process which many country used to adopt to tackle several economic condition. In this paper the main focus is on analyzing the positives and negatives of the deficit spending and how it generally works. Definition of deficit Spending: Just like every other business entities, government also has revenues and expenditures... ....
3 Pages(750 words)Term Paper

Spending Figures

...Spending Figures US and Japan Healthcare spending figures Globally, the United s spends far more in terms of its health care than any other nation. According to the New York Times, the United States tends to spend more money on health care as compared to the other twelve industrialized nations thus Netherlands, Germany, France, Japan, Denmark, Canada among others (Wise & Yashiro, 2006). In 2009 alone, the United States spent a total of $8,000 per person on health care services as compared to Japan, which spent one-third of it on its health care. Unlike the United States, Japan tends to offer an interesting model in terms of its health care. In as much as the health care...
2 Pages(500 words)Admission/Application Essay

Healthcare Spending

...Health Care System and System Theory Application Affiliation Health Care System and System Theory Application Question One: Application of System Theory in Achieving Desired Outcomes The responsibility of managing health care coupled with increased health care demand has been largely informed by developing a clear theoretical platform that seeks to achieve desired goals. Accessibility of health care as well as its affordability and quality are the areas now the most complex interrelationship in health care system. Balancing quality, affordability and having an appropriate health care system are now the hardest issues to achieve and substantially make the health care dynamics. The need for organized national and global healthcare...
6 Pages(1500 words)Essay

Government Spending

...Government Spending Question One The Troubled Asset Relief Program (TARP), Bailouts and Quantitative Easing (QE) were used by the US government to revive the economy following the financial crisis. However, the exact figure used through TARP, Bailouts and QE largely remained unknown but according to Nankin and Schmidt (1), the Treasury Department was authorized by Congress to spend $700 billion in addressing the financial crisis. On the other hand, the Treasury Department (1) points out that the collective figure spent on TARP, Bailouts and QE was reduced to $475 billion. However, it is imperative to note that that figure ($700 billion) is strictly what was committed in 2008 to curb the financial crisis...
2 Pages(500 words)Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Research Paper on topic Deficit spending for FREE!

Contact Us