Mboweni’s underlying logic confuses the scope of fiscal policy
If it’s structural reform vs spending, spending that prevents hundreds of businesses from going bust, and millions going hungry, will make a much bigger difference
Finance minister Tito Mboweni’s op-ed is an important contribution to the current economic debate (Structural reforms — not spending — are the best way to achieve growth (https://www.businesslive.co.za/bd/opinion/2020-07-14-tito-mboweni-structural-reforms-not-spending-are-the-best-way-to-achieve-growth/), July 14). Among other things, it succinctly captures the manner in which the minister and, presumably, the National Treasury, approaches fiscal policy.
While the minister makes a number of important points, the underlying logic confuses the application and unduly narrows the scope of fiscal policy. The minister argues that government spending has and will in the near term continue to be ineffective at stimulating economic growth, and that high levels of debt are retarding growth. ..
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