The fiscal response to the COVID-19 pandemic leaves an economically threatening legacy of high budget deficits and public debt.
Australian governments should take action to reduce the burden the stimulus measures have placed on the future economy and taxpayers.
Unlike emergency monetary responses to increase liquidity and loosen credit availability, panic government spending binges — particularly of the cash splash and welfare support kind — cannot be readily withdrawn once announced, and have lasting negative macroeconomic consequences.
The idea that copious government spending necessarily mitigates the macroeconomic impact of a crisis is a Keynesian fallacy.
Already a subscriber? Log in
Subscribe for just $2 a week
Try a month of The Spectator Australia absolutely free and without commitment. Not only that but – if you choose to continue – you’ll pay just $2 a week for your first year.
- Unlimited access to spectator.com.au and app
- The weekly edition on the Spectator Australia app
- Spectator podcasts and newsletters
- Full access to spectator.co.uk
Or
Comments
Don't miss out
Join the conversation with other Spectator Australia readers. Subscribe to leave a comment.
SUBSCRIBEAlready a subscriber? Log in