What is the difference between a deficit financing and a debt financing?

What is the difference between a deficit financing and a debt financing Introduction: The Essence of Financing Hello everyone! Welcome to our discussion on deficit financing and debt financing. When it comes to funding various initiatives, governments and organizations often resort to these financing methods. But what sets them apart? Let's find out! Deficit Financing: Bridging the Gap Deficit financing refers to a situation where the expenditure of a government or an organization exceeds its revenue. To cover this shortfall, they resort to borrowing. This borrowing can be from various sources, such as issuing bonds or taking loans. The idea behind deficit financing is to stimulate economic growth by injecting money into the system. It is often used during times of recession or when there is a need for substantial investments. Debt Financing: Borrowing with a Plan