The AFR View
Keynes v Reagan: the will to restore prosperity
To borrow money now to fight the virus and then grow so that we can repay it will need discipline – and a determination to reform old ways and drive greater economic efficiency.
The bills for the sudden disaster of COVID-19 and the forced economic shutdowns are coming in. The federal budget deficit this financial year will hit $185 billion, or nearly 10 per cent of the entire economy’s annual output.
Gross government debt is forecast to rise from $560 billion at the 2019 budget to $851 billion by next June, the biggest hit to public finances outside the two world wars of the 20th century.
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