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Why a Keynesian stimulus is best for both the economy *and* public finances

There is no trade-off between supporting workers and fiscal sustainability

By Carys Roberts and Carsten Jung  

Keynes's central insight. Photo: TopFoto/PA Images

The economic costs of the pandemic are mounting up as we approach the depths of the long Covid winter, with firms crumbling under large piles of debt. The Debenhams bankruptcy alone will likely trigger 12,000 job losses. However, a full-blown jobs and economic disaster is not inevitable. The Chancellor Rishi Sunak has the tools to prevent enduring economic damage, preserve businesses and jobs, and spur the private sector into creating new ones. Crucially, by doing so, he can also strengthen the public finances and stabilise debt. The question is whether he is willing to…

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