"Pump-priming" is deficit spending by a government on public works and "welfare" projects in an attempt to raise the purchasing power of the recipients and thus stimulate and revive economic activity to the point that deficit spending will no longer be considered necessary to maintain the desired economic activity. "Pump-priming" sometimes fails to catch on, as in the case of the American New Deal of the 1930's. At other times, it starts a boom which inevitably leads to a recession, depression or "flight into real values". See also "Trade cycle" and "Monetary theory of the trade cycle".
- Percy L. Greaves, Jr. "Mises Made Easier ", 1974. Referenced 2014-08-20.