Compensate everyone by lowering VAT and excise duties? Stupid plan, say economists –

Compensate everyone by lowering VAT and excise duties?  Stupid plan, say economists –

“Reckless plans”, says economics professor Bas Jacobs. “As a country, we are getting poorer due to rising prices. We have to endure this pain.”

According to Jacobs, it makes no sense to compensate everyone if we all have less money. “There is no more money, we cannot pretend that there is no money.” The result of the policy is that we are passing the bill on to future generations, he says.

redistribute

Marieke Blom, chief economist at ING, wholeheartedly agrees. “If we all have to deal with a higher than expected bill, there is no economic reason to say ‘we are borrowing this money from future generations because we find it so boring now’.”

It’s also very boring, Blom admits. “But all you can do is redistribute the pain.” This means that households with sufficient income have to bite the bullet, while households that spend less have to be compensated.

Source: RTL

follow:
\