BRIAN KANTOR: Hard truths about pandemic spending
The government can call on the central bank to provide money but is not trusted to do the right thing
When or rather if economies return to their pre-shock growth paths, the cost-benefit analysis of the lockdowns is unlikely to bear favourable witness to the responses made to the Covid crisis by SA.
The cost is the difference between GDP on its pre-Covid path (which was on a regrettably moderate incline) and what is likely to be produced and earned before we get back on that path. My own back-of-envelope calculations came to a very large number, equivalent to possibly R1-trillion in money of the day, or equivalent to a quarter of pre-Covid GDP. Certainly, a very large amount of potential income will have been sacrificed. The benefits in the estimate of the value of years of life saved by the lockdowns will be much harder to calculate...