Deficit Spending: An Essential Tool

One of the most conspicuous economical term used frequently in American politics is ‘deficit spending’,
or simply, ‘budget deficit’. Deficit spending forges ahead the economic sector over a particular period of
economic quagmire while on the contrary; it poses for degradation in advancement a great deal. From one
point of view, in American fiscal policy, deficit spending is a chief support in making fiscal prudence.
Also, in the previous events of depression in economic issues of America, the sudden stock market crash
all these were carried away successfully by deficit spending made at that particular time. However, from
other viewpoint, deficit spending provides a negative stimulation in the state’s economy. For instance, it
reminds of the Kennedy Tax Cuts in 60s. The occurrences of high interest rates, inflation- all these are
taking places as a result of deficit spending. Again, analyzing the positive influence, there exists a
proportional relationship between the government’s expenditure and demands. This results out the greater
employment which leads making greater money. On the other hand, the ultimate crisis takes place in
private sectors which are economically active and running in full swing, due to the loans the government
needs from them. From all the discussions above, it can be cconcluded that, applying deficit spending, the
government may make the economy sound and stable for a while, but in most of the cases, it is the private
sectors which require to bear the brunt of such application.