Excess savings (not enough demand) after the health crisis may provide a way around the question of solidarity between economic agents

During the lockdown period, the weakness of activity results from the inability of many workers to go to work. After the lockdown, however, the weakness of production will probably result from weak demand. This has given rise to a debate on the question of solidarity: how and in what proportions should the loss of national income be borne by the various categor ies of economic agents ? But if the weakness of GDP is due to a demand shortfall, and therefore excess savings, there may be a way around this question of solidarity. The government should maintain a cyclical fiscal deficit that offsets the demand shortfall and keeps the income of all economic agents at a level commensurate with full employment. This fiscal deficit should be easy to finance, as the government can borrow the excess savings. This obviously does not eliminate the need to use fiscal deficits to finance economic policies designed to jump-start demand; nor does it eliminate the need to monetise a share of these fiscal deficits, if the excess savings are not spontaneously invested in public sector bonds.