Deficits are not new. In the past the government ran deficits mainly during wars. The deficit and debt tended to be relatively small and short lived. The deficit and debt problem has significantly deteriorated since the 1980's. For the first time in 30 years the last fiscal year ended with a surplus.
Deficits are higher for many developed countries like Britain, Canada, France, and Australia.
Note that the fiscal policy instruments are basically government expenditures and taxes. We have seen in the last few chapters that increases in government expenditures and decreases in taxes can stimulate the economy by increasing aggregate expenditures in the short run. So in the short run, the government can help the economy to fight a recession by changing its expenditures and taxes. However, fiscal policies typically suffer from various lags. Due to all the lags it takes a substantial amount of time to be effective in combating a recession.