On the deficit fiscal policy and China's fiscal deficit

摘要

The essence of Expansionary fiscal policy is the policy of deficit financing, it is usually by extending spending, increasing investment to stimulate economic growth in a recession. U.S., Japan and some members of EU have been adopted it at different times and have achieved different results, but the basic common denominator is to produce a higher deficit rates. The practice implies, the deficit will not cause problems in short-term economy, but in the long run, the cumulative effect of this deficit will eventually affect the economy running. In order to cope with the financial crisis, China implemented the proactive fiscal policy in 1998 and 2008 respectively, the deficit ratios were significantly higher than normal annuals. One view is that China's fiscal deficit rate is positive and moderate, the other view is that China's fiscal deficit rate in both vertical and horizontal direction are higher than required to pay close attention, then there is a view that although the deficit was not high in China but they still pay attention to guarding against financial risks. As we all know, in the Keynesian theory there is not a modest deficit rate, maybe Keynes did not pay attention to this issue. That the EU requires members' deficit rate not exceeding 3% has almost become a criterion in the whole world. China's budgetary revenues are not standardized, it is not one-sided to be optimistic, we shall do some work to adhere to the long-term budget balance, regulate the budget system and control moderate fiscal deficit.