Deficit Spending

This essay is not quite good; however, it is written and I just want to post it. :P The number of words in this essay is 258.

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Deficit Spending
Based on the reading and listening information, deficit spending has one advantage. The value occurs when the approach is applied to severe economic atmosphere. The speaker states that the deficit policy stimulates, energizes and stabilizes dreadful economies. One of the examples provided from the reading passage is an exploit of deficit strategy to the Great Depression of the 1930s in America. As a consequence, American economic catastrophe was alleviated and, later on, markets continue to run as well as the more money people gain. In other words, The government spends large amount of money to create demand which leads to huge employment. The more employment is, the more people's income is. At last, people create more demand again and the circulation continues.

On the other hand, even though the speaker agrees with a good side of deficit spending, the method also has two negative points, while the reading passage does not give any. To begin with, use of the method negligently, i.e., when the economy is healthy and its capacity is already maximized, may yield economic crisis. A concrete instance of this result was the static economy of the 1970s. That is, owing to competition among government and private sectors, the resulting economy causes high unemployment, high interest rates, and high inflation. Secondly, if the method involves a loan of foreigner's money, the interest payback will not return to the homeland's economy. This will totally ruin the economy. In short, the deficit strategy has more disadvantages than its positive side and I am convinced to follow the speaker.