Question

How does deficit spending affect the national debt?

Answer 1

The budget surplus or deficit is the difference between total federal revenue and spending in a given year. When the budget is in deficit, the government borrows from the public. Alternatively, when the budget is in surplus, the government can reduce debt held by the public.

Answer 2

Deficit spending is the spending of money raised by borrowing from the public. It is used by the government to quicken the economy during times of crisis. Unless the "borrowing" is refunded, deficit spending can increase the national debt.