johnhemming wrote:The economic outcome of lockdown is not yet clear. Potentially we could bounce back a long way, but if we dont the possible outcomes include a much more challenging problem than from 2008. Hence any changes are potentially more severe than many of the relatively peripheral changes we have seen.
Agreed. I dispute the premise of the original question. We never repaid the extra debt from 2007-2009. We merely decided to live with perpetually higher deficits. So why not do that again, especially since interest rates are near zero?
The three choices are higher taxes, which as dod notes will kill the economy. Or bring back austerity and slash spending. Or ignore it and float the deficit higher and then inflate away its real value. I go for the latter two.