Fiscal policy and toothpaste

Karl Otto Pöhl, the President of the Bundesbank, said in 1980: 'Inflation is like toothpaste: once it's out, you can hardly get it back in again.” The same can be said today of fiscal deficits and public spending in Europe and particularly in France: once governments have run up huge fiscal deficits to help all categories of economic agents in difficulty during the COVID crisis, it will be very difficult to refuse requests for additional public spending or to seek public spending savings. Public spending, too, is like toothpaste .