This book establishes a theoretical framework that analyzes the enormous effects of fiscal deficits. It provides a comprehensive assessment and discusses the corresponding policy implications. The book is divided into four parts. Part I introduces the issues and discusses the academic and practical value of the topic. Part II provides a comprehensive overview of related domestic and foreign budget deficits and establishes a theoretical framework for analyzing the macro-economic effects of fiscal deficits. Part III elaborates on the effects of a fiscal deficit policy on different macroeconomic variables, such as policy sustainability, national savings, nominal interest rates, money supply, inflation, and balance of trade. Part IV concludes with an empirical analysis, offering an overall evaluation of China's fiscal deficit policy and its implications for macro-economic regulation and control.