The coronavirus pandemic is of course primarily a social crisis, but the fiscal costs are also important. A sharp and sustained deterioration in the public finances could have major implications for future government spending and taxation. Many are already asking 'how will we pay for all this?' and worried about the prospect of 'Austerity 2.0'. … Continue reading How will we pay for all this?
Category: Fiscal Policy
No, the government still hasn’t found a ‘magic money tree’!
Who’d have thought the Treasury’s ‘Ways and Means’ facility at the Bank of England could cause so much excitement? The two parties have agreed a temporary extension of what is, in effect, the government’s overdraft account with the central bank. Cue great delight from advocates of printing money to pay for higher public spending, such … Continue reading No, the government still hasn’t found a ‘magic money tree’!
Don’t shoot the rating agencies!
On Friday (27th March), the credit rating agency Fitch downgraded the UK’s sovereign credit rating by one notch, from AA to AA-, citing worries about the economy and a jump in government debt. Bond investors at least are shrugging this off. But the announcement has revived long-standing concerns about the role of rating agencies during … Continue reading Don’t shoot the rating agencies!
Coronavirus crisis doesn’t mean Corbyn was right
Given how trendy it is to blame ‘capitalism’ for all the world’s other ills, from wars to climate change, it’s no surprise that some have been quick to pin the current crisis on the failures of free markets too. Many have also used the need for unprecedented government intervention as evidence that the state should … Continue reading Coronavirus crisis doesn’t mean Corbyn was right
Plain-speaking Economics 