"Unprecedented" budget deficits ,all in the glory of COVID 19!

Governments looking for an exit , looking for an excuse to wriggle out, looking for an alibi have all got a valid reason-COVID 19.

In the name of COVID 19 nations are filing compensatory suits against sovereign countries. Govt agencies and big corporates around the world are invoking force majeure clauses for reneging on the contracts. Suddenly the corporate legal etiquettes are no more sacrosanct. The times are unprecedented and the usage of the word 'Unprecedented" has been unprecedented ,as commented by one journalist.

Govts. are exceeding their budgetary deficit limits, want to try "the nuclear options" of fully monetising the deficits,drop helicopter money, encourage everybody to borrow and spend,pushing the lenders to go on a lending spree and loan deferrals and waivers left, right and centre. In short spend your way through the disease and misery. But none of them are clear as to who is going to foot this spendthrifts' bill. We, in three years time, will be saddled with the repayments and interest on it with inflation tax .We should be prepared for this or should prepare our children for this if we do not survive this pandemic.Nothing is free in economics.

But all this leads us to the fundamental question is the Govt trying to white wash its inability in raising tax GDP ratio , rein in fiscal deficit and push for the GDP growth, all in the name of Covid 19.

Probably the Govt is reluctant to draw a separate COVID 19 budget for this reason.Possibly it wants to purge the fudged Govt deficits and wash of all its past accumulated sins due to window dressing of budgetary deficits, all in one go under the guise of Covid 19.

Covid 19 may well turn out to be Budget saviour after all the mayhem.

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