How deep a hole are we in? The Institute of Economic Affairs has just published a primer I’ve written on the state of the public finances, which digs into this question. On the bright side, I argue that there is no need for any form of austerity, including tax rises, to fill a gap left … Continue reading Why we don’t need tax rises to pay for Covid
Category: Monetary policy
On 4th December, the UK parliament’s Public Accounts Committee (PAC) published a report on the production and distribution of cash. The press release was headlined ‘PAC urges Bank of England to investigate “missing” £50 billion of sterling notes’. This emphasis was unhelpful and drew attention away from the real problems. The media coverage did at … Continue reading Access to cash is a far bigger problem than the ‘missing’ £50 billion
I’m relatively relaxed about the fiscal costs of Covid: UK government borrowing will drop sharply as the economy recovers; the increase in the debt burden is manageable; and there’s no need to ‘pay for Covid’ with ‘austerity’ of any kind. (See my earlier blog explaining How I Learned to Stop Worrying and Love the Debt.) … Continue reading Why fiscal responsibility still matters
Another month, another set of scary numbers on the public finances: the UK government borrowed an additional £36 billion in September and total public debt rose to £2,060 billion, or around 103.5% of national income (GDP). But there is still no need to panic. For a start, the figures are entirely as expected. If anything, … Continue reading How much should we worry about UK government debt?