Governments these days seem to be hooked on 'money boosts' to fix just about any economic problem...
Economy slow down? Give it a boost. People struggling? Give them handouts. Markets shaky? Borrow more.
There is nothing inherently wrong with money boosts in certain situations, but we've become reliant on them - they used to be regarded as only to be used in an extreme crisis, a temporary emergency fix, but now governments are becoming dependent.
The problem here is that by relying on these temporary fixes, governments may be failing to fix the underlying structural economic weaknesses..
Money boosts in big democracies have exploded with each problem. What used to be about 1% of our country's total output shot up to over a third during Covid.
This matters because these boosts make it less urgent to make real changes. Tough choices—like cutting wasteful spending, fixing welfare, or making public services better—come with political risks. Borrowing and giving out money, though, buy time and make people happy. The costs get pushed off, spread out, and often blamed on outside problems.
But putting things off isn't free. Paying interest on debt takes money away from public services. More people end up on welfare without better chances to get ahead. Public services get big and clunky, eating up more money but getting less done.
Modern democracies have taught voters to expect a safety net for every dip. The problem is at some point the State just isn't going to be able to take up the slack anymore, and introducing real economic stability is going to be painful.... it's going to mean less to go around, basically!
