Fiscal Deficit
Fiscal deficit is an economic term that refers to the difference between a government’s total revenue and total expenditure. It is an important indicator of a government’s financial health and is used to measure the government’s ability to finance its activities. When a government’s total expenditure exceeds its total revenue, it is said to have a fiscal deficit. This deficit is usually financed by borrowing from the public or from other sources, such as international financial institutions.
History of Fiscal Deficit
The concept of fiscal deficit has been around since the early 19th century. It was first used by British economist David Ricardo in 1817 to describe the difference between a government’s total revenue and total expenditure. Since then, the concept has been widely used by economists and governments to measure the financial health of a country. In the United States, the federal government has been running a fiscal deficit since the early 1970s.
Comparison of Fiscal Deficits
| Country | Fiscal Deficit (in % of GDP) |
|---|---|
| United States | 3.7% |
| Japan | 7.2% |
| Germany | 0.5% |
| France | 3.4% |
| United Kingdom | 2.4% |
Summary
Fiscal deficit is an important indicator of a government’s financial health and is used to measure the government’s ability to finance its activities. When a government’s total expenditure exceeds its total revenue, it is said to have a fiscal deficit. This deficit is usually financed by borrowing from the public or from other sources, such as international financial institutions. For more information about fiscal deficits, you can visit websites such as the World Bank, the International Monetary Fund, and the Organization for Economic Cooperation and Development.
See Also
- Government Debt
- Budget Deficit
- Public Debt
- National Debt
- Fiscal Policy
- Tax Revenue
- Government Spending
- Monetary Policy
- Fiscal Stimulus
- Fiscal Consolidation
