The Encyclopaedia Britannica defines deficit financing as the practice of borrowing or minting money to cover shortfalls in a budget, usually a government budget. The amount financed is built into the annual budget, not a sudden shortfall. Deficit financing is not the same thing as debt; while debt may have accrued over years due to annual deficits, a deficit is the shortfall in a specific budget covered by a loan.Know More
John T. Harvey, a contributor at Forbes Magazine, points out that the surplus created by a deficit winds up in the private sector, where it can create faster economic growth, stimulating the economy overall. This, however, should only be seen as a short-term stimulus. Economics editor David Wessel of the Wall Street Journal points out that while short-term deficit spending may be good for creating growth in a sluggish or shrinking economy, habitual deficit spending is unsustainable and eventually will cause a market crash, at which point the indebted government will no longer be able to borrow money and will be forced to reduce spending.
Balanced-budget amendments are the main strategy for eliminating deficit financing in governments. These amendments force budget planners to spend no more than anticipated incoming revenue. For a business running regular deficits, the solution is to either increase overall revenue or go out of business.Learn more about Financial Planning
After the drug money is seized and the required reports taken, an order of disposition is obtained from the Attorney General allowing the police department to retain a portion of the money for its budget with the remainder going into an asset fund held by the government. As of 2014, the amount of money obtained from drug busts has tripled recently from $567 million to $1.6 billion nationwide.Full Answer >
Personal finance refers to any and all decisions that relate to the budget of an individual or family. This can include monthly income and their monthly expenses. Loans, credit cards, investment accounts and retirement plans are also a part of personal finance.Full Answer >
A person can create a time-phased budget by charting a certain period of time and then allocating resources to that specific period, states 4castplus. This type of budgeting allows individuals and organizations to better understand resource expenditures during particular periods, or phases.Full Answer >
To retire at 50, a person must live below his means and adhere to a strict budget, while also saving and investing a significant portion of his income. To establish savings, it is necessary to cut expenses and increase earnings. A retiree can increase retirement savings by getting less-expensive housing.Full Answer >