The world is entering a new era of big government

 The world is entering a new era of big government

“KEEP YOUR eye on one thing and one thing only: how much government is spending,” Milton Friedman once said. Today his eyes would be popping. Governments have spent $17trn on the pandemic, including loans and guarantees, for a combined total of 16% of global GDP. On current forecasts, government spending will be greater as a share of GDP in 2026 than it was in 2006 in every major advanced economy. America is about to put $1.8trn into expanding its welfare state; Europe is doling out a €750bn ($850bn) investment fund; and Japan is promising a “new capitalism”, with even more government largesse.

In the coming decades the state’s economic footprint will expand yet further. Four-fifths of the world economy is now subject to a net-zero emissions target, a goal that in Britain is projected to raise the government-debt-to-GDP ratio by 21 percentage points by 2050 as the state subsidises decarbonisation and growth…

Read full article…www.economist.com