Paying for the coronavirus rescue measures with Joe Branigan

<p>Social distancing measures to contain coronavirus have crashed economies around the world, reducing government tax revenues. At the same time, governments have brought in massive economic rescue packages to support workers and businesses. An obvious question is: where is the money coming from to pay for these rescue packages and to make up for the lost tax revenue? Economics Explained host Gene Tunny explores this question with Joe Branigan, Director of <a href="https://www.tulipwoodeconomics.com.au/" target="_blank">Tulipwood Economics</a>. </p><p><i>Timestamps</i></p><p>Use these timestamps to help you jump right to the highlights:</p><ul><li>5:45 - Gene recalls his time in the Australian Treasury's Budget Policy Division where he dealt with debt policy and cash management issues</li><li>7:15 - discussion of how governments borrow money by selling bonds</li><li>12:20 - discussion of bond auctions/tenders by the Australian Office of Financial Management (AOFM)</li><li>17:30 - who buys bonds? (for Australian info, check out the excellent AOFM article <a href="https://www.aofm.gov.au/investors/wholesale-investors/investor-insights/australian-government-securities-investor-base" target="_blank">The Australian Government Securities investor base</a>)</li><li>20:00 - discussion of Bank of England direct financing of UK Gov't spending (discussed in a pay-walled article in the Financial Times, <a href="https://www.ft.com/content/664c575b-0f54-44e5-ab78-2fd30ef213cb" target="_blank">Bank of England to directly finance UK government's extra spending</a>), monetisation of deficits, and Modern Monetary Theory</li><li>29:20 - repaying versus refinancing/refunding the debt</li><li>31:10 - long-term problems/risks with government debt</li><li>37:30 - overview of Joe's research on costs and benefits of coronavirus policy measures</li></ul>