Deficit spending Research Paper Example | Topics and Well Written Essays - 750 words

Deficit spending - look for Paper ExampleGovernment spending spurs economic growth in the country. When we focus on the spacious run, this is basically a positive macroeconomic effect. Government acquire from other countries is used to finance political science projects. This leads to increase in national infrastructure and stocks. This promotes the growth of the country in the long-run period. Currently, the federal governance is investing heavily in education and health sectors. They can be the best gainers with the expected increase government borrowing. All these benefits associated with deficit spending can be easily estimated through analysis on cost benefit (McConnell, 1996).Most of the Keynesian economists attribute deficit as an appropriate tool for managing the conglobation demand levels in the country. This is because increased borrowing from other countries is an economic stimulus to demand in the country. This helps to calm the aggregate demand. However, these econ omists argue that the federal government should use and implement fiscal policies to contain. Besides this, managed levels of demand helps to sustain economic growth and reduce the general level of unemployment in the country.Deficit spending is financed through normal borrowing. This leads to increase in public debt which is after financed through the revenues collected by the federal government later in future. This is a burden to the public because it implicates negatively to their lives. In most cases, taxes are raised on basic commodities for the federal government to raise revenue to cater for this.Increase in government borrowing leads to increase in public debt in the economy. From an economist point of view, a larger public debt results into superior interest levels. Hence, the citizens of that particular country will be required to pay higher taxes in company to finance this debt in long term.Public debt is mostly financed through taxes