There’s a huge bill coming due

The following is an excerpt from an editorial in The Guardian:

To grasp how low are the expectations for the (British) economy, consider this: On Wednesday it was announced that the U.K.’s national output had just had its biggest drop since the great crash of 2008 — and the immediate response of many analysts was surprise that it hadn’t fallen further.

However grim those numbers look, they are just the beginning. The near unanimous view among economists is that the U.K. is diving into what the chancellor, Rishi Sunak, warns is a “significant recession.”

However bad that sounds, it is probably a gross understatement: the Bank of England is forecasting the worst recession in more than 300 years.

The reason is simple: to try and quell the pandemic, this government has deliberately shut down huge swathes of the economy.

Over the past few weeks, shops, offices and assembly lines have all closed.

In the meantime, the government will need to prop up households and companies with public money. This will be a costly business, but the time to worry about the total bill is not while hundreds of our fellow citizens are dying each week.

To talk now about austerity, to dream up tax rises or public-sector pay cuts to foot the eventual bill, as suggested by a leaked Treasury paper, is completely unnecessary.

The key is to ensure that the bailout money is spent as fairly and effectively as possible.