With the Covid-19 pandemic in 2020, government spending, the budget deficit and government debt increased sharply. Before this there was talk of austerity in numerous budgets, but with the pandemic, a plan was put into effect to cut government spending in real terms. I will be the first to argue that reducing the debt burden is important, but this past week research has been published that shows that this cannot happen without a cost.
* The Economics Minute is supported by the NWU Business School.
