With the economy underperforming by so much, it will be some time before tax as a share of GDP gets back to its medium-term target value. What of spending? Here there has been a huge expansion of what we are again calling automatic stabilisers, the largest of which are payments related to the very sharp increase in unemployment.
(And of course the higher rates on these payments also amplify this effect.) There has been a tendency by some commentators to bemoan spending cuts, but spending has, in the past year, jumped substantially as a result of this automatic stabilizer effect.