Crowding out (economics)
In economics, crowding out is a phenomenon that occurs when increased government involvement in a sector of the market economy substantially affects the remainder of the market, either on the supply or demand side of the market. One type frequently discussed is when expansionary fiscal policy involving deficit spending reduces investment spending by the private sector: An increase in government spending "crowds out" investment because the government's increased need to compete with the private stock and bond market for loanable/investable funds requires it to offer higher interest rates to obtain the additional funds, making the private market less attractive by comparison and thus drawing funds away from the private-sector investment spending for which it functions as a substitute from the perspective of investors.