NERI: No one should use the Covid budget deficit to invent a crisis

Employment and strong wages, not tax hikes, are the key to restoring the public finances

Cutting public expenditure in the teeth of a recession – austerity – does not lead to recovery but prolongs economic misery. Picture: Larry Cummins

The financial crash of 2008 and the subsequent recession were thought to be a once-in-a-generation economic event. But it is remarkable that just over 10 years later we face a recovery from a deeper economic shock. 

Of course, the nature of our Covid-19 crisis presents a different set of challenges but even so, there are lessons we would do well to remember.