Tightening fiscal policy is mainly to increase revenue and reduce expenditure and reduce deficit. The measures to increase income are mainly to increase taxes, with the purpose of restraining enterprise investment and personal consumption expenditure, so that the disposable income of enterprises and consumers will be reduced and the purchasing power will be weakened. The measures to cut expenditure are mainly to reduce the expenditure of government agencies, curb public investment and reduce welfare expenditures such as subsidies and relief.

Tight fiscal policy is a kind of macro fiscal policy, which refers to the policy of restraining the growth of total social demand by increasing fiscal revenue or reducing fiscal expenditure. Because the result of increasing revenue and reducing expenditure focuses on fiscal balance, tight fiscal policy is also called surplus fiscal policy.

Policy flexibility alternation refers to the implementation of expansionary policies in one period and austerity policies in another period, and the two are used alternately. After World War II, the successor of British economist J.M. Keynes developed Keynes's short-term static analysis into long-term dynamic analysis and put forward compensatory fiscal policy. They believe that the primary problem of fiscal policy is not to seek balance of payments, but how to make up for the difference through fiscal revenue and expenditure arrangements when there is a difference between total social demand and total supply, so as to restore the economic operation to a balanced state. They also believe that the capitalist economy is not always in a state of crisis, but sometimes it is prosperous and sometimes it is depressed. Fiscal policy can't always be based on expansion, and we should use expansionary policy and contractive policy alternately according to the cyclical fluctuation of the economy.

During the depression, the government should reduce taxes, increase expenditures and implement a deficit policy; In a prosperous period, the government should increase taxes, reduce expenditures and implement a surplus policy, and the surplus should be frozen for use in a depressed period. Keynesianism also emphasizes the role of fiscal automatic stabilizer. If the progressive income tax is implemented, when the economy is depressed, the total income will drop, and the tax revenue will also drop automatically, which will become an automatic adjustment means to increase social demand and alleviate the economic depression; When the economy expands, the total income rises, and the tax revenue also rises automatically, which has become an automatic adjustment means to control social demand and ease economic expansion. The government's transfer expenditure has the same effect.