Can the Public Be Convinced to Stop Worrying About the National Debt?

A new approach to economics called Modern Monetary Theory (MMT) suggests that the national debt should be the last thing that we worry about, but can this radical approach be translated into a workable political narrative?

Governments around the world have responded to the COVID-19 crisis by engaging in an unprecedented amount of government spending to support jobs rendered impossible due to lockdown. According to the Office for Budget Responsibility (OBR) the UK government deficit is set to rise to £322 billion this year, with the debt/GDP ratio rising above 100% of GDP for the first time since 1963 and the story is similar for other advanced economies.

These unprecedented measures have received widespread support from across the political spectrum, with politicians on the left and the right accepting that spending must rise in the short term to protect jobs and the wider economy. But, there is equal agreement that these measures can’t go on indefinitely, and that, in the medium term, a mixture of spending cuts and tax rises will be necessary to bring the public finances back into balance. As the chancellor, Rishi Sunak put it in his statement to the…