With the economy collapsing, can Britain actually afford to do whatever it takes to defeat this virus?

Nonetheless, they reflect genuine concern about the economic costs of the lockdown now being imposed to flatten the curve of the virus’s progress. These are going to be considerable, not just to business, but to the public finances, still struggling to recover from the financial crisis of a decade ago.

When the economy is force-stopped like this, the Government becomes the insurer of last resort, underwriting wages and lost revenues. The solvency of the state itself then gets questioned…

Andrew Bailey, Governor of the Bank of England, has relaunched QE and cut interest rates to virtually zero. Monetary policy has probably gone as far as it can in addressing the crisis. It is up to the Government to do the rest

To counteract these negatives, the Bank of England is cranking up the printing press anew, with an additional £200 billion of “quantitative easing” and another emergency rate cut – fire fighting that only partially quells the flames. 

The idea that countries with their own currencies can’t go bust because they can print the money to pay their debts is only partially true. Markets will take it out on the currency, causing inflation to take-off, if they suspect this kind of debt monetisation, with the central bank directly financing the deficit, is going on.

I have got myself into trouble on social media for making a variation of the following point, so I must choose my words carefully. We are already at a point where the immediate and no doubt lasting economic costs of Covid-19 are out of all proportion to the distress of the disease itself.

In attempting to combat the virus, as all civilised societies must, we are doing ourselves untold economic damage. This matters if it impairs our ability to weather similar future threats – economic, epidemiological or military – or indeed it saddles future generations with an intolerable debt burden.