<P> Most economists favor the use of automatic stabilization over active or discretionary use of deficits to fight mild recessions (or surpluses to combat inflation). Active policy - making takes too long for politicians to institute and too long to affect the economy . Often, the medicine ends up affecting the economy only after its disease has been cured, leaving the economy with side - effects such as inflation . For example, President John F. Kennedy proposed tax cuts in response to the high unemployment of 1960, but these were instituted only in 1964 and impacted the economy only in 1965 or 1966 and the increased debt encouraged inflation, reinforcing the effect of Vietnam war deficit spending . </P> <P> Structural and cyclical deficits are two components of deficit spending . These terms are especially applied to public sector spending which contributes to the budget balance of the overall economy of a country . The total budget deficit, or headline deficit, is equal to the sum of the structural deficit and the cyclical deficit (or surplus / es). </P> <P> A cyclical (temporary) deficit is a deficit that is related to the business or economic cycle . The business cycle is the period of time it takes for an economy to move from expansion to contraction, until it begins to expand again . This cycle can last anywhere from several months to many years, and does not follow a predictable pattern . </P> <P> The cyclical deficit is the deficit experienced at the low point of this cycle when there are lower levels of business activity and higher levels of unemployment . This leads to lower government revenues from taxation and higher government expenditure on things like social security, which may cause the economy to go into deficit . While the cyclical component is affected by government decisions, it is mainly influenced by national and international economic conditions which can be significantly beyond government control . </P>

When did deficit spending become a constant element of federal fiscal policy