budget deficit发表评论(0)编辑词条

A budget deficit is when a country's government spends more than it takes in from taxes or other forms of revenue. Although individuals, companies and other organizations can run deficits, the term usually applies to governments.

That's because there are immediate penalties for most organizations that run persistent deficits. If an individual or family does so, their creditors come calling.

As the bills go unpaid, their lose a good credit score, which makes new credit more expensive. Eventually, they may have to declare bankruptcy. The same applies to companies who have ongoing budget deficits. Their bond rating is lowered, and they have to pay higher interest to get any loans at all.

However, most governments can run moderate deficits for years. That's because they are usually highly likely to repay their creditors. Government leaders retain popular support by providing services. If they want to continue being elected, they want to spend as much as possible while keeping their lenders happy.

Many countries, including the United States, have the added benefit of being able to print their own currency. As bills come due, they simply create more credit and pay it off. This does lower the value of the currency as more supply is available. But, if the deficit is moderate, it doesn't hurt the economy. In fact, it can boost economic growth because government spending is a component of a nation's total output, known as Gross Domestic Product (GDP).

The consequences aren't immediate. Creditors are satisfied, because they know they will get paid. The nation's leaders don't have to decide who gets paid, and who doesn't, because the government has the ability to pay everyone. Elected officials just keep promising the voters in their district more and more benefits, military bases, and tax cuts. Telling voters that they will get less from the government would be political suicide. To voters, elected officials, and creditors, the government's ability to run mild deficits means no pain, and all gain -- year after year after year.