Deficit spending as in war financing?
Harold James: COVID-19, debt monetization, and lessons from war financing,
Webinar at the Bendheim Center for Finance, Princeton University, April 24, 2020.
To combat the economic consequences of COVID-19 pandemic, the governments of the USA, the European Union and other countries in the transatlantic region have mobilised trillions of dollars. Massive subsidies, grants and loans as well as massive economic stimulus packages are intended to halt or at least cushion the crash of the global economy. The resources mobilized by governments and central banks to combat the global crisis of 2008/2009 are already far exceeded.
The volume of public debt and the associated methods of state intervention provoke a comparison with the methods of war financing, as Harold James elaborates in his seminar statement. However, the discussion of his theses also shows the limits of such a comparison.