This blog is mainly about the governance and future of policing and crime services. (Police & Crime Commissioners feature quite a lot.) But there are also posts about the wider justice system. And because I am town councillor and political activist, local & national issues are covered a little, as well.

Monday, April 29, 2013

The deficit myth is the grossest lie ever enforced upon the people

Not long ago*, a Conservative economist posted a powerful article on the Huffington Post. He began the article with these words:
As a Conservative I have no pleasure in exposing David Cameron's deficit claims. However, as long as the party continues to talk down the economy via the blame game, confidence will not be given an opportunity to return.
Please read the full article!

In this blog post, I want to just list the main points Ramesh Patel makes:
  • The UK has the lowest debt in the G7 group of countries – a fact that the Chancellor admits (even though he constantly says the opposite: see this you tube video)
  • Beware chancellors talking in cash terms about the economy: debt always should be seen in context
  • In 1997, Labour inherited a debt of 42% of GDP. By the start of the global banking crises in 2008 the debt had fallen to 35%.
  • Secondly, in 1997 Labour inherited a deficit of 3.9% of GDP (not a balanced budget ) and by 2008 it had fallen to 2.1%
  • The deficit was then exacerbated by the global banking crises after 2008. The IMF agree.
  • The UK had the 2nd highest deficit in the G7 (not the World) after the US. This was not as a result of overspending prior to and after 2008 but due to effects the financial services industry being such a large part of the UK economy. (IMF also agree)
  • “The deficit myth is the grossest lie ever enforced upon the people and it has been sold by exploiting people's economic illiteracy”
*By the way, the original article was published in October last year.…

Some debt figures to ponder on:

UK Debt as % of GDP (including financial interventions) & then without

Jan 1998: 40.3 | 40.3
Aug 2007: 35.8 | 35.8
Aug 2008: 44.0 | 38.1
Oct 2008: 133.5 | 39.2
May 2010: 152.1 | 53.4
Mar 2013: 140.3 | 75.4

Source here

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