The COVID bill has not been cancelled, it has simply been deferred

GDP in Europe has fallen considerably in 2020 under the effect of the first and then second wave s of the CO V ID pandemic. But households and companies have not suffered this income loss thanks to massive fiscal deficits monetised by the ECB, i.e. helicopter money. One may therefore think that the COVID bill has been cancelled, as the money creation has averted a loss of income despite the loss of GDP. This analysis applies to the euro zone, but also to other OECD countries. But in reality, the COVID bill has not been cancelled - it has simply been deferred. The mechanisms are as follows: In 2020, economic agents’ income, which has been maintained, cannot be spent , because GDP has fallen as a result of the public health measures. It has therefore been saved; L et us assume that GDP normalises from 2021 . If the additional savings from 2020 are spent, there will be excess demand for goods and services and therefore inflation, which will create a tax on the holders of money; If, from 2021, the additional savings from 2020 are invested in financial and real estate assets, the prices of these assets will rise, which will create a tax on asset buyers in the form of higher prices; If the excess savings are never used, it will be as if income had not been maintained in 2020. GDP is abnormally low in 2020; even if it normalises in 2021 and subsequent years, there will be a cumulative loss of GDP. The income support in 2020 will be offset by a subsequent tax in the form of either an increase in goods and services prices or an increase in asset prices.