CSFI Economic Outlook: Andrew Hilton's take on what's important, and what's not...

Why you should watch: Last week's FT headline, that the US economy is surging while the EU suffers a double-dip recession, is misleading, in that more recent data suggests that the recovery is picking up pace in the EU too - even if Europe is lagging America. But the real mystery is why governments on both sides of the Atlantic are insisting on pouring gasoline on the fire with big new spending plans. Biden's US$1.8 trillion American Families Plan is the latest such effort - and it is hard to conclude otherwise than that it is nothing more than 'progressive' social engineering. It certainly isn't warranted by the state of the economy. Even though it is supposed to be fully-funded (by 'soaking the rich'), chances that the spending portion will be approved by Congress are a good deal higher than chances that it will genuinely be paid for by tax increases. All in all, Trump and Biden have now pushed through (or at least proposed) spending packages totalling US$9.2 trillion to combat the virus - on top of the Fed's unprecedented monetary accommodation. No wonder commodity prices are going through the roof. Meanwhile, if one believes the WHO, the pandemic itself is at its height; if you believe Western governments, it is almost over. Take your pick.

In his Weekly Economic Outlook, Andrew Hilton, the CSFI’s Director, discusses the current crisis, its impact on the global economy, and what we may be missing.

Andrew is a former World Bank economist, who also ran a small economic consultancy advising international clients, particularly in the Middle East. He has an MA from New College, Oxford, an MBA from Wharton, and an MA and PhD from the University of Pennsylvania, where he was a Thouron Scholar and Kent Fellow.

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Produced/Edited by Alex Treptow