deficit financing

Definitions (2)

1. The method used by a government to finance its budget deficit, that is, to cover the difference between its tax receipts and its expenditures. The main choices are to issue bonds or to print money.
2. The assumption that a change in government spending or taxes will be financed by a change in the government budget deficit, rather than by an accommodating additional change in spending or taxes to keep the budget balanced. Example: a "deficit-financed increase in government purchases."

Use deficit financing in a sentence

You should try and make sure you understand how the deficit financing will work before you get involved with it.

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The deficit financing engaged in by the nation was worrisome to some economists who said the government was spending too much.

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The government's current deficit financing plan could be very detrimental to the country if it is approved for use, but they are convinced that there is no other way.

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