Government Spending And Deficit Spending

Deficits spending is the funds the government spends on expenditure to jump start the economy when a recession occurs. The government spends on goods and services that exceed its income. For example, the United States is experiencing an increase in spending on the wars in Afghanistan and Iraq increased in aggregate demand on military expenditures. On the other hand, during the World War II, there was an increase in defense spending, but the economy had a rapid recovery from the Great Depression (2013, p. 165). In resolving such economy issues, a famous British economist John Maynard Keynes in 1930s introduced a theory and argued that it will help the government to intervene and smoothen productivity All nations and the economy rely on the government to regulate its activities.