Why do governments run budget deficits during a recession, knowing that such deficits decrease investment spending?

During a recession, the economy is in a state of contraction or decline. Output and income is declining, demand is weak and business activity is waning. Without government intervention, this is expected to continue without any hope of breaking the cycle (weak demand -- weak output/income - weak economy - weak demand...). Hence, it is necessary for the government to intervene during a recession.

In order to pump prime the economy and end the cycle, the government often engages in an expansionary policy by increasing government spending. This creates additional demand in the economy which will hopefully create more output and income. Another way is to reduce tax rate in order to increase disposable income that will increase demand. Either way, the government runs the risk of increasing its budget deficit to help the economy recover and end the recession.