Definition, Meaning & Synonyms
deficit-financing
noun
ˈdɛfɪsɪt ˈfaɪnænsɪŋ
Definition
Deficit financing refers to the practice of funding government spending by borrowing money rather than by raising taxes or generating revenue.
Examples
- The country resorted to deficit financing to manage the economic crisis.
- Deficit financing can help stimulate the economy in the short run.
- Long-term reliance on deficit financing may lead to higher national debt.
Meaning
It occurs when a government’s expenditures exceed its revenues, leading to a deficit that needs to be financed through loans or bond issuance.
Synonyms
- Borrowing
- Debt financing
- Loan-based funding
