Deficit spending can stimulate the economy during times of recession from "summary" of The Deficit Myth by Stephanie Kelton
Deficit spending can be a powerful tool for managing the economy, especially during times of recession. When the economy is in a downturn, households and businesses typically cut back on spending, leading to a decrease in overall demand. This reduction in demand can cause a vicious cycle of declining production, rising unemployment, and further decreases in spending. By injecting additional funds into the economy through deficit spending, the government can help break this cycle. When the government spends more than it collects in taxes, it effectively puts more money into people's pockets. This extra money can then be used to purchase goods and services, which in turn stimulates economic activity. Deficit sp...
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