I recognise the writers' areas of expertise, but clearly macroeconomic policy is not one of them.
"but the current generous approach to funding can’t continue forever. At some point the extraordinary fiscal costs of 2020 will have to be recovered either through taxation or a reduction in public spending".
This is wrong.
I suggest the author examines this bias, and learns something about the finances of a sovereign govt (MMT, or the works of eg Steph Kelton); and with that the importance of sectoral balances.
For UK Govt to remove spending power from the economy at this time would be a massive economic and human disaster. There is no inflation threat, and with increasing unemployment it is the duty of the state to inject more spending into the economy, preferably in a way that benefits most citizens, especially the poorest, and those that have the greatest marginal propensity to spend.
The state financing position is just a balance sheet KPI that, sure we need to be aware of, but has little importance in terms of a properly functioning economy at this time. Private spending is likely to be curtailed for a long time, due to the combination of Covid and Brexit uncertainty.
We need to kickstart the fiscal multipliers, to generate a long-term better position, not hamstring the economy.
That said, clearly the package of taxation measures needs updating (eg the DST).
Apologies if the sentence quoted above was just a shortcut to talking about the DST, but I thought it worth flagging it.
.. Taxpayer's hat on - the reasoning for this seems to be that it was a way to get around the Cost structures within the Depts. As a taxpayer, if we and the Govt impose restictions on pay I don't want the Depts in question to ignore that and just pretend that they're not employing people. Rules is rules. Or not.
My answers
I recognise the writers' areas of expertise, but clearly macroeconomic policy is not one of them.
"but the current generous approach to funding can’t continue forever. At some point the extraordinary fiscal costs of 2020 will have to be recovered either through taxation or a reduction in public spending".
This is wrong.
I suggest the author examines this bias, and learns something about the finances of a sovereign govt (MMT, or the works of eg Steph Kelton); and with that the importance of sectoral balances.
For UK Govt to remove spending power from the economy at this time would be a massive economic and human disaster. There is no inflation threat, and with increasing unemployment it is the duty of the state to inject more spending into the economy, preferably in a way that benefits most citizens, especially the poorest, and those that have the greatest marginal propensity to spend.
The state financing position is just a balance sheet KPI that, sure we need to be aware of, but has little importance in terms of a properly functioning economy at this time. Private spending is likely to be curtailed for a long time, due to the combination of Covid and Brexit uncertainty.
We need to kickstart the fiscal multipliers, to generate a long-term better position, not hamstring the economy.
That said, clearly the package of taxation measures needs updating (eg the DST).
Apologies if the sentence quoted above was just a shortcut to talking about the DST, but I thought it worth flagging it.
And another thing...
.. Taxpayer's hat on - the reasoning for this seems to be that it was a way to get around the Cost structures within the Depts. As a taxpayer, if we and the Govt impose restictions on pay I don't want the Depts in question to ignore that and just pretend that they're not employing people. Rules is rules. Or not.