The pandemic killed 200 thousand people in the UK. Are we ready for the next time? Experts reckon will be even less prepared should we see another pandemic in the near future. Prof Tom Koch from the University of British Columbia reckons we don’t have long to wait - the next one could strike in the next five to eight years.

If you were a virus with an understanding of how economics is taught, this is exactly how you would have planned it. Yet governments to spend a fortune on the first blow, knowing they would spend the intervening years trying to pay back the debt, rather than spending new money on the preventative measures to dampen the impact of the second blow.

If we had a clearer understanding of how fiat currencies function, maybe we would be better prepared. Meanwhile Steve has a mask he can sell you.

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Economists seem conditioned to think that we need to suffer before an economy can get back on track. They argue an economy can’t grow if there is a large amount of accrued government debt. That the economy needs confidence to grow, and the confidence won’t exist the government owes a lot of money.

Phil suggests to Steve that confidence and the private sector’s a willingness to invest are two staple requirements for economic growth. A government deficit will also help, but does it really help in terms of the growth in the money supply as much as private borrowing? And isn’t a growth in the money supply essential to growth?

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It’s clear to just about everyone that we won’t reach the climate targets set out in the Paris agreement. It was a pipe dream even before President Trump  v2.0 came along. The various COP summits, which rely on agreement from everyone, are nothing more than gabfests. They are a COP-out. This was recognised in a paper this month from the Tony Blair Institute for Global Change, entitled ‘The Climate Paradox: Why We Need to Reset Action on Climate Change’.

There are some sound observations, says Steve, but it doesn’t go far enough. It doesn’t recognise is the mismatch between climate scientists and economists. Climate scientists believe global warming could ultimately be an extinction level event, he says, whereas economics see it having a relatively minor impact on GDP.  The more we listen to the economists the more likely the climate scientists will be right.

There’s one positive takeout from the paper though. It recognises that we need breakthrough solutions. But that’s likely to come from high cost, high risk investment. Who is going to pay for that?

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It’s clear that President Trump lied to the American people about his reciprocal tariffs. Many of the countries he is imposing tariffs do not impose anywhere near those numbers on imports from America. As Phil points out, some countries, like Cambodia, that sell cheap goods to the US don’t buy from the US because they can’t afford to on their low wages. You can only have trade equalisation if you have similar income levels.

Steve takes us through the formula that was sued to calculate these ‘reciprocal’ tariffs. The only resolution to the issue, says Steve, is a new currency for international trade. An idea the Americans knocked back at Bretton Woods.

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It’s likely that many countries around the world will face import tariffs in retaliation for imposing a value-added-tax on American goods sold in their own country -  alongside other goods, taxed equally, that are not from America. As Steve outs it this week, “What tortured brain cells have communicated to other tortured brain cells to make a proposition that VAT on imports from America is discriminatory”.

Still, it looks like it might happen. And how do you resolve that situation. Do you get rid of a value added tax? Phil asks whether that could be a good thing. It’s unfair, complicated, bureaucratic and easily avoided. Would we all be better off with a transaction tax?

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