According to the Dictionary of finance and investment terms deficit spending is the “excess of government expenditures over government revenue

According to the Dictionary of finance and investment terms deficit spending is the “excess of government expenditures over government revenue, creating a shortfall that must be financed through borrowing” (Downes & Goodman, 2014). In many other countries you will hear the term deficit financing or restricted sense. An economical deficit occurs when the country expenses are greater than the financial gain or surpasses the idea income that is being received. Governments can cover there deficit by borrowing from the banking system of of its country. Some of society thinks that deficit and debt are the same, but they are different. The main thing to point out when it comes to deficit spending is less income and more spending. There is a point where deficit spending can be meet by raising taxes or increasing the price on goods and public services. Lets look at some advantages and disadvantages of deficit spending and how it effects crowding-out.