How are we going to pay for it all?

[PeteXXX]

How is lockdown, eat out, furlough scheme's etc going to be paid for?

Sky News ~ Resolution Foundation

Tax increases. Capitol Gains tax changes. National Insurance changes.

 

[Joey Shabadoo]

They won't.
The Tories will cut spending.
Labour will increase taxes but ignore the debt and come up with new ways of spending the increased revenue.

 

[All uphill]

A very good question.

Added to the "economic turbulence" resulting from our departure from the EU there are going to be some difficult choices to be made. Capital gains and inheritance taxes would be a good place to start in my opinion.

I expect future governments will sit on the debt and UK borrowing costs will rise.

 

[Pale Rider]

How is lockdown, eat out, furlough scheme's etc going to be paid for?

Hopefully by a tax on apostrophe misuse.

 

[figbat]

Hopefully by a tax on apostrophe misuse.

That'll net them some serious cash!

 

[Tenacious Sloth]

Apparently, they’re planning on selling Northamptonshire to the French.

The other 99.9% of the debt will be reclaimed by various tax increases.

 

[roubaixtuesday]

How is lockdown, eat out, furlough scheme's etc going to be paid for?

Sky News ~ Resolution Foundation

Tax increases. Capitol Gains tax changes. National Insurance changes.

Long term interest rates are currently close to zero, so measures to tide us over the crisis do not need paying for. Ever. Thinking they do is a fundamental misunderstanding of macro economics.

However, the structure of the economy will change, and will be much weaker at the end than it was at the start. That does require change, and is an opportunity to make the economy more equitable: shift taxes to be more progressive: from spending to income to wealth.

 

[vickster]

Apparently, they’re planning on selling Northamptonshire to the French.

The other 99.999999% of the debt will be reclaimed by various tax increases.

FTFY
They might make a couple of quid more by throwing Cambridgeshire into the deal

 

[DCLane]

It'll be by long-term bonds and taxes that we'll be paying for decades. No different to the costs for the 2nd World War, that we've just finished paying off, and the re-patriation payments to slave owners ( ) that we finished paying off a few years ago.

You, I and our grandchildren will be paying for it through increased taxation.

 

[PeteXXX]

Hopefully by a tax on apostrophe misuse.

And failure to place a full stop after etc, possibly?

 

[Pale Rider]

so measures to tide us over the crisis do not need paying for. Ever.

The debt is only sustainable while interest rates remain very low.

And failure to place a full stop after etc, possibly?

Ooo, now you've come up with a genuinely important question.

At one time, a full stop was used to denote an abbreviation, such as ltd. as in limited company, and etc.

If the abbreviation is at the end of the sentence (as above), the full stop does double duty.

However, using a full stop to denote an abbreviation has largely fallen out of favour.

In your OP, etc is in the middle of a sentence, so I would do as you did and not use a full stop.

 

[nickyboy]

It'll be by long-term bonds and taxes that we'll be paying for decades. No different to the costs for the 2nd World War, that we've just finished paying off, and the re-patriation payments to slave owners ( ) that we finished paying off a few years ago.

You, I and our grandchildren will be paying for it through increased taxation.

Not really. All that happens is new bonds are issued to repay the onld ones. This is fine until one of the following happens:

a) Interest rates rise so bonds have to offer higher rates of interest to attract buyers
b) UK economy is considered more likely to default on the debt

Neither of those two things are on the horizon. However, interest rates are at historical lows. Presumably they can't remain there forever. But we've all got used to them with mortgage repayments and the goverenments around the world have done the same and have expanded government debt dramatically, even before the epidemic. There will be a reckoning on this when interest rates return to historical norms but as to when, I have no idea

 

[roubaixtuesday]

The debt is only sustainable while interest rates remain very low

50 year bond rate currently 0.9%

Borrowing to get over the crisis is a non issue; paying for furlough is essentially irrelevant.

As I said, exiting the other side with sustainable finances does matter, and that does need to be fixed. Not the short term costs.

 

[Pale Rider]

There will be a reckoning on this when interest rates return to historical norms but as to when, I have no idea

I think that must be true.

In the last 30 years or so bank base rates have varied from about zero to about 16%, if memory serves.

The Bank of England won't want to increase rates in the current climate, but their hand has been forced in the past, which almost certainly means it could be again.

Selfishly, I expect the debt can can be kicked down the road long enough for me not to have to worry, but future generations will have to deal with it at some point.

 

[Moodyman]

Government spending for Covid has been via bonds.

Normally, bonds are bought by investors and corporates, but due to the extreme circumstances this time, the bonds have been bought by the Bank of England. This is called money printing, and whilst no money has been printed, it's been created out of nothing. Bit like adding a nought to one's savings balance.

This works fine as a solution of the last resort if a) you've a strong economy and b) you don't do it often.

This is because money printing dilutes the money already in the economy - bit like diluting your orange squash. Over dilution leads to higher inflation and hyperinflation - think Germany 1930s.

But, if you've an economy of 3 trillion dollars like the UK does, then pouring another £400bn isn't going to overdilute it.

So, don't fret. None of us are suddenly going to pay double the tax.