There’s a belief taxes may not have to go up to pay for federal pandemic spending.
Lakehead University economics professor Livio Di Matteo thinks the government can find other ways if the economy recovers and revenues rise.
“They’re going to have to essentially wind down a lot of the new spending initiatives over the next six months to a year…hopefully within two years you will have closed the gap and balanced the budget again,” explains Di Mateo.
However, the economics professor indicates if there is a second wave of the coronavirus the government will have no choice but to raise taxes.
When it comes to the predicted $1 trillion debt, Di Matteo is somewhat optimistic.
He appears confident the government will be able to control a key component of the debt the ratio between the debt and the gross domestic product.
Di Matteo says the trick is to get the debt to GDP ratio back down to around 30 percent where it was before the pandemic began. The fiscal update predicted it would go hit 50 percent.
