4 min read.Updated: 29 Dec 2020, 08:38 PM ISTManish Sabharwal
The budget mustn’t get caught in ‘presentism’ and should reinforce long-term thinking for us to adapt to an evolving world
Historian Fernand Braudel warned against obsessing with “fireflies and froth"—the disease of ‘presentism’ that infects economists and policymakers with the belief that current circumstances are special, unique and unprecedented. Covid’s pain not only reminds us of our economy’s pre-existing conditions (inadequate formalization, financialization, urbanization, industrialization and human capital), but has also demonstrated a policy willingness to take the long view by ignoring ‘presentist’ demands for unprecedented deficit financing (we close with a high 12% of gross domestic product, or GDP, but if fiscal deficits could make countries rich, then no country would be poor). I make the case that the next 25 years for our economy will be very different from the last 25 years for many reasons. And the upcoming budget has a unique opportunity to take advantage of the covid policy window by amplifying existing long-term thinking on formal job creation and employability.