Fiscal Deficit

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What is 'Fiscal Deficit'

Fiscal deficit is 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. Who thinks fiscal deficits are a good idea?

    Find out why nearly all political actors support the concept of governments incurring fiscal deficits, either explicitly ... Read Answer >>
  2. What is the effect of a fiscal deficit on the economy?

    Take a deeper look into the real impacts of government budget deficits on the economy, and why government financing reduces ... Read Answer >>
  3. What is the difference between a current account deficit and a trade deficit?

    Learn the meanings of the macroeconomic terms current account deficit and trade deficit, and understand the differences between ... Read Answer >>
  4. Is there any limit on fiscal deficits at the federal level?

    Discover the legal, theoretical, practical and political limitations imposed on the fiscal deficits accumulated by the U.S. ... Read Answer >>
  5. Which countries run the largest budget deficits?

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  6. Why do some analysts argue that trade deficits aren't bad for the economy?

    Understand the reasons why trade deficits, reviled by many economic analysts, are not always a bad thing in the eyes of many ... Read Answer >>
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