On May 5, Truepoint resumed the “Truepoint Talks” webinar series, taking a closer look at the economic support governments and central banks have provided around the globe in response to the COVID-19 outbreak. While this economic intervention has been welcomed by the financial markets, the longer-term implications of this massive government spending must be considered as well.
The natural question these actions raise is “How are we going to pay for all of this?” The simple answer is with debt – a lot of debt. Which leads to the more difficult questions: “How will we ever pay off this debt?” and “What are the broader implications of this debt?”
In short, while this level of spending and debt is eye-popping, the aggressive action is likely better for the country’s future fiscal position than the ramifications of not providing the economic support. The full recording can be accessed below: