Deficit Spending
The amount by which spending exceeds revenue
Real World Example
During the French Revolution, deficit spending was a significant issue as the government spent more money than it earned, leading to a financial crisis. This overspending, partly due to funding wars and helping the American Revolution, contributed to the economic instability that fueled the revolution. When Napoleon came to power, he continued deficit spending to finance his military campaigns, which temporarily stabilized the economy but eventually led to further financial strain. Today, deficit spending is common in many countries, including the United States, where governments borrow money to fund programs and services. This affects everyday life as it can lead to increased national debt, which might result in higher taxes or reduced public services in the future, impacting citizens' financial well-being.
