Advantages Of Deficit Spending

The United States of America is very unique in the way that it decides to spend its money. Typically, the government ends up spending money they do not currently have which is known as deficit spending. Usually the ways this occurs is the government is given an allotted amount on money to spend over a certain fiscal period. For the sake of argument let’s use a three-month period, and use one million dollars as the allotted amount that can be spent during this period. Once the government spends more than they are allocated for that particular fiscal period, and continues to spend during that period the create what is known as a government debt. This is what we refer to as deficit spending. The way the government usually reconciles this balance

Some of those things are positive and some are not. However, we will discuss some of the differences and see how they impact. First I will discuss the advantages of deficit spending. One of the best advantages of deficit spending is it enhances the growth of the economy. The reason this is possible, is simply because the government will eventually have the funds. What this does is allows them to continue to pour money into the infrastructure. That creates a snowball effect and creates employment for various personnel allowing the growth I spoke about. Another advantage to deficit spending is what it forces the government to do. When deficit spending occurs it forces the government to regulate how they spend and what they spend. This is good for the citizens because the government needs to watch spending, and if they don't it usually forces them to raise taxes which usually affects us. Lastly it allows the United States to be protected in many different ways, but most importantly by helping our military. For example, if our country is struggling financially and we get into a war, and are unable to fund it there would be a major problem. So deficit spending would allow us to fund it regardless if we had the money or not and essentially bail us out if we were to get into a situation and couldn't fund

It can negatively impact the economy because we will typically have to utilize the saving to pay back the debt that has occurred, and if a problem arises they would have used that money in saving to pay the debt and result in having no money use if the situation occurred. Another potential disadvantage that could be caused if deficit spending occurs is the amount of investments that the country may be able to engage in. If we are unable to manage our money and spending correctly and continue to engage in deficit spending companies will be less willing to engage in partnerships with us, and not want to invest their money in us as we prove we are incapable to handle it. Lastly, it can risk what we as Americans and countries around the world know us as and that's the most powerful nation. This forces the United States to borrow money from different organizations or countries and allows them to place demands on our country before lending us any money. If those demands are to severe or have a major impact on us this could potentially cause issues, we as a nation do not want to endure. The crowding out effect deals with interest rates that are increased and ends up affecting the returns on those private investments that the government is