I like your take on the furlough scheme. Economists seem convinced it kept household finances afloat and prevented many businesses from going under. However, it also led to some absurd giveaways to people employed in sectors where WFH was no hardship. Anecdotally, many of those furloughed workers were still working, and earning money for their employer (especially the self-employed, of course). But you could also say this mistake was compounded by the energy bill bailout in 2022/23. When did it become policy that government would underwrite energy prices and shield households from global events? To build on your WW2 comparison: the government then introduced rationing, it did not subsidise unlimited consumption. In contrast, instead of reducing energy demand at a time when the market was signalling that demand should fall, The energy bill subsidy meant demand stayed the same, with the state picking up the cost. All at a time when - as you write - households had additional savings accrued through the pandemic, which could have been used to cover the higher energy bills (of course poorer households need help). We refer to household savings besides pensions and so forth as being ‘for a rainy day’. Yet when that day came, the state stepped in with a large umbrella. After that, it’s hard to know how a government will be able to look (middle class, comfortable) voters in the eye and explain that being an adult means anticipating adverse events, and making provision for them.
I like your take on the furlough scheme. Economists seem convinced it kept household finances afloat and prevented many businesses from going under. However, it also led to some absurd giveaways to people employed in sectors where WFH was no hardship. Anecdotally, many of those furloughed workers were still working, and earning money for their employer (especially the self-employed, of course). But you could also say this mistake was compounded by the energy bill bailout in 2022/23. When did it become policy that government would underwrite energy prices and shield households from global events? To build on your WW2 comparison: the government then introduced rationing, it did not subsidise unlimited consumption. In contrast, instead of reducing energy demand at a time when the market was signalling that demand should fall, The energy bill subsidy meant demand stayed the same, with the state picking up the cost. All at a time when - as you write - households had additional savings accrued through the pandemic, which could have been used to cover the higher energy bills (of course poorer households need help). We refer to household savings besides pensions and so forth as being ‘for a rainy day’. Yet when that day came, the state stepped in with a large umbrella. After that, it’s hard to know how a government will be able to look (middle class, comfortable) voters in the eye and explain that being an adult means anticipating adverse events, and making provision for them.