What practice describes a government spending more than its tax revenue?

Deficit spending accurately describes the situation where a government spends more than it collects in tax revenues within a specific period, typically a fiscal year. This practice can reflect a government's intention to stimulate economic growth, fund public services, or address urgent financial needs despite not having sufficient current revenues.

When a government engages in deficit spending, it often finances the shortfall by borrowing money or issuing bonds, leading to an increase in public debt. This approach can be contentious; proponents argue it allows for crucial investments and economic support during downturns, while critics caution it may lead to long-term fiscal challenges if not managed correctly.

The other options represent different financial concepts. Fiscal responsibility generally refers to managing a government’s budget in a sustainable manner, often implying a balanced approach to spending and revenue generation. A budget surplus indicates that a government has more tax revenue than it spends, which is the opposite of deficit spending. Lastly, capital investment refers to expenditures made to acquire or maintain fixed assets like infrastructure and is not inherently related to the relationship between government revenue and expenditures in the context of deficits or surpluses.