Fiscal Deficit

DEFINITION of 'Fiscal Deficit'

When a government's total expenditures exceed the revenue that it generates (excluding money from borrowings). Deficit differs from debt, which is an accumulation of yearly deficits.

BREAKING DOWN 'Fiscal Deficit'

A fiscal deficit is regarded by some as a positive economic event. For example, economist John Maynard Keynes believed that deficits help countries climb out of economic recession. On the other hand, fiscal conservatives feel that governments should avoid deficits in favor of a balanced budget policy.

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RELATED FAQS
  1. How long has the U.S. run fiscal deficits?

    The United States began its history indebted, owing more than $70 million to the French and Dutch after the end of the Revolutionary ... Read Full Answer >>
  2. Can state and local governments in the US run fiscal deficits?

    There is nothing about the nature of state and local governments that prevents them from running deficits in the same manner ... Read Full Answer >>
  3. Who thinks fiscal deficits are a good idea?

    Fiscal deficits describe the year-to-year annual current account shortfalls in a government budget, such as government expenditures ... Read Full Answer >>
  4. What is comparative advantage?

    Comparative advantage is an economic law that demonstrates the ways in which protectionism (mercantilism, at the time it ... Read Full Answer >>
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    Microeconomics is generally the study of individuals and business decisions, macroeconomics looks at higher up country and ... Read Full Answer >>
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