Deficit spending refers to a situation where a government or an individual spends more money than they earn in a given period. This means that they are borrowing funds to cover their expenses, and the amount borrowed is added to the existing debt of the entity. In other words, deficit spending involves running a budget deficit, where the government's total expenditure exceeds its total revenue. The difference between the two is financed by selling securities or taking out loans. This practice can lead to an increase in debt levels and may have long-term consequences for the economy if not managed properly.