A common sentiment, but a misplaced concern. Measures to provide income support to individuals and business through this crisis helps ensure a strong economy on the other side. We must unwind these measures as crisis passes, but econ/fiscal situation would be worse without them. https://twitter.com/jackmintz/status/1252430383443898371

The pandemic is the negative shock here, not the supports governments provide during the lockdown. A pandemic without measures to control the spread would be worse. Massive broken connections between firms, employees, and customers would be difficult to rebuild.

And much of this is transitory fiscal shocks, not permanent. Measures are transfers rather than distortionary policies. Yes we must scale back later and tackle fiscal challenges to come. But governments here and elsewhere are doing what they should.

Topping the list of govts whose fiscal houses are in need of a rethink is Alberta. Not because of pandemic, but because of policies that rely heavily on resource revenues to fund public services. Those concerned about public finances cannot ignore this. Those that do, aren’t.

Norway runs a surplus because it uses taxes to fund public services and it saves its massive resource revenues. I agree we have much to learn from Norway. But this isn’t an argument to scale back public health measures to support individuals and businesses through this crisis.

An alternative to focusing the deficit/GDP ratio without context would be to discuss the pros and cons of specific policies being adopted by govts. I’m 100% confident the Feds are making some mistakes here and there (given the necessary speed, that’s unavoidable).

And nothing in this thread should be interpreted as lack of concern with debt, I am concerned. This should motivate long term planning, a clear fiscal anchor, and an honest discussion of policy tradeoffs. Govt, of course, and senior advisors too should promote that.