Definition of Deficit Reduction

What does the term "deficit reduction" mean? What is meant by the term "deficit reduction"?

As you can probably imagine, "deficit reduction" is the act of reducing a deficit.

What is a deficit? A deficit occurs when a country (or a company, or a person) spends more than what they bring in. A very simple formula:

Definition of Deficit Reduction - Financial DictionaryIf Expenditures > Revenues Then You Have a Deficit

In the United States, for instance, the country is currently spending roughly $1 trillion more than what they bring in. The country is obviously keenly interested in bringing this deficit down, hence the term, "deficit reduction".

Deficits are reduced by reducing spending, increasing revenues or a combination of the two.

The "right" tend to believe that reducing spending is the answer to reducing the deficit, while the "left" tend to believe that increasing revenues via increased taxation (especially on the wealthy and corporations) is the way to go.

-- Articles That Mention Deficit Reduction:

"Clean" Debt Ceiling Bill Likely To Be Passed

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Merrill Lynch: Another US Downgrade Likely By End of Year