How to support the purchasing power of low-income households?
The sharp rise in energy and food prices is leading governments to support the purchasing power of low-income households. But how can this be done efficiently? By targeting transfer payments to low-income households, and not simply distributing payments to all households, in order to limit the cost to the government. By transferring lump sums instead of targeting payments to purchase s of certain products, in order to prevent sellers of these products from taking advantage of the government support to increase their prices. Not by modifying the prices of the goods concerned. For example, the government should avoid freezing prices in order to enable price signals to be visible and the saving s effort (less energy consumption, etc.) that they bring about. By financing this support with tax revenues and not public debt, as there is no justification in transferring the burden of supporting current consumption to future generations, especially if higher energy and food prices are permanent.