What is deficit spending? How to use in English

The term "deficit spending" refers to a situation where a government spends more than it earns or collects in revenues. This results in a budget deficit, which is the difference between the government's expenditures and its revenues for a specific period. The concept of deficit spending emerged during the Great Depression in the 1930s when many economists argued that government intervention was necessary to stimulate economic growth. By spending more than it earns, the government could inject more money into the economy, increase demand, and accelerate economic activity. Keynesian economics, which advocates for activist government policies, supports the use of deficit spending as a tool to mitigate economic recessions and promote economic growth. Critics of deficit spending argue that excessive borrowing can lead to increased interest rates, debt burdens, and inflation, which can harm the economy in the long run. They also contend that debt financed by future generations is not a sustainable way to manage public finances. Nonetheless, proponents of deficit spending counter that the benefits to the economy outweigh the costs, particularly during times of economic distress or to fund essential infrastructure projects or social welfare programs that benefit future generations. In summary, deficit spending is a policy tool used by governments to manage their budgets during economic downturns, promote economic growth, or finance essential public projects, but it must be used judiciously, as excessive borrowing can have adverse long-term effects on the economy.