When spending exceeds revenues, deficit spending is the resulting imbalance in the annual federal budget
What happens when expenditure outpaces income in the government?
- When a government's expenditure exceeds its revenue, a deficit is created.
- Intentional overspending that is done to boost the economy is sometimes referred to as deficit expenditure.
- The most well-known supporter of deficit spending as a method of economic stimulation is British economist John Maynard Keynes.
- The federal budgeting process is used by policymakers to decide which expenditures are most important and how much money will be needed to fund them.
- The budget process is one of the most significant and challenging aspects of determining public policy because of the scale and complexity of those decisions.
- The federal budget is used to establish financial priorities, including how much money will be spent on things like social security, defence, and education, among many other things.
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