Member-only story
2 min video looking at the unintended consequences of governments giving m money to it citizens — https://youtu.be/e_tQtkpAiF8
As they say; “it is easy to spend someone else money” and that is what governments have been doing and in doing so have caused some potentially unintended consequences.
The UK government introduced furloughing i.e. paying workers to stay at home due to the covid-19 pandemic at an estimated cost of £14 billion a month
However, partly due to lockdown restrictions of not being able to go to the local ‘rub a dub dub’ (pub) restaurant or hairdresser, Brits in JUST April repaid £7.4 billion of their outstanding debts, the highest on record ever.
The Paradox of Thrift — as hypothesised by Keynes when people save and do not spend resulting in lower economic growth would appear to have arisen as the UK economy shrank by over 20% in April
From a survey from money.co.uk the average household in the UK has repaid £2,879 during lockdown
Did the chancellor of the exchequer in the UK want to pay off citizens debts while blowing a hole in the government’s finances? Surely a better solution would have been to pay the utility bills, rent, mortgages not just giveaway cash?
