2020 forever will be associated with the coronavirus sweeping Canada and the world. However, its impact on the economy was much greater than on our health. Far fewer people were stricken by the virus than the initial apocalyptic warnings from health care experts, while its impact on incomes, jobs and government deficits was larger and longer lasting than economists forecast last spring.
Will the growth of government be sustained? It is a natural human tendency to predict the future by extrapolating a straight line from recent developments. Occasionally this works; the postwar liberal welfare state was birthed by massive state interventions in response to the Great Depression and the Second World War. Many analysts wishfully see a similar emergency-induced expansion of government during 2020 as signalling a permanent upturn in spending, on everything from green energy infrastructure to a guaranteed annual income.