Government Spending
Government spending or government expenditure consists of government purchases, which can be financed by seigniorage, taxes, or government borrowing. It is considered to be one of the major components of gross domestic product.
John Maynard Keynes was one of the first economists to advocate government deficit spending as part of a fiscal policy to cure an economic contraction. In Keynesian economics, increased government spending is thought to raise aggregate demand and increase consumption.
Read more about this topic: Keynesian Formula
Famous quotes containing the words government and/or spending:
“The tide which, after our former relaxed government, took a violent course towards the opposite extreme, and seemed ready to hang every thing round with the tassils and baubles of monarchy, is now getting back as we hope to a just mean, a government of laws addressed to the reason of the people, and not to their weaknesses.”
—Thomas Jefferson (1743–1826)
“Keeping accounts, Sir, is of no use when a man is spending his own money, and has nobody to whom he is to account. You won’t eat less beef today, because you have written down what it cost yesterday.”
—Samuel Johnson (1709–1784)