Who Will Pay for the Economic Lockdown?

Summary:
Page Title:Who Will Pay for the Economic Lockdown? – C.D. Howe Institute
Article Title:Who Will Pay for the Economic Lockdown?
URL:https://cdhowe.org/publication/who-will-pay-economic-lockdown/
Published Date:March 23, 2021
Accessed Date:February 6, 2025

Someone has to pick up the tab for lockdown-induced debt

  • Federal debt is likely to be about $550 billion higher because of pandemic-related lockdowns, and fairness requires this increase in debt be retired before the next generation starts working and paying taxes, which will occur 18 to 25 years from now.
  • The analysis in this paper indicates that the income loss arising from the recession can only be deferred, not eliminated, by issuing debt because debt has an economic cost.
  • Government needs to implement a set of debt reduction policies that, given the distribution of income losses during the recession, achieves a fair sharing of the burden of the recession, without passing the debt on to future generations.

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