Tuesday, January 13, 2009

Dad's nose. Mum's eyes. Gordon Brown's debt.


Anonymous said...

I was much amused by this delicious quote of Sam Brittan in his column in the Financial Times:

"Those alarmed by UK official projections showing public sector net debt climbing from 36 per cent of gross domestic product last year to 57 per cent in 2012 should bone up on their history. There are long passages in Macaulay showing how the nation prospered despite increases in the national debt - regarded by sages as catastrophic. In his one and only Budget speech, Harold Macmillan noted how the national debt had risen from £600m in 1914 to £8.4bn in 1939 and £27bn in 1956 - representing 27, 133 and 146 per cent of GDP. As Macmillan put it: 'Whatever the temporary difficulties from trying to run too fast, if we stand still, we are lost.'" [Financial Times on 5 December 2008: Sam Brittan: A framework for economic stability]

Have you not read accounts of the recent interview of David Cameron by Andrew Marr on BBC TV?

"In the interview, carried out in his west London home, Mr Cameron admitted making mistakes. He said: 'I now see just how unaffordable Labour's spending plans are. Perhaps we could have seen that earlier.' Mr Cameron said he would increase government spending from £620bn this year to £645bn next year - rather than the £650bn proposed by ministers."

After reading that, I fell about laughing. Is Cameron really serious about the Conservatives spending only £645bn next year rather than the £650bn proposed by ministers?

Good grief! The difference of £5bn is within error margins.

I shall be greatly interested to compare the detail of the proposed $775 billion fiscal stimulus in America proposed by the incoming Obama administration with the £20 billion (= $30 billion) stimulus proposed in the Pre-Budget Report here last November:

Btw even before that stimulus of the American economy, the US federal budget deficit is predicted to reach $1 trillion in the next financial year and that when government debt in America is a significantly larger percentage of GDP there than here. But then economists advising the Obama administration - like Harvard prof Larry Summers - are evidently very concerned about the possibly of a deep recession lasting years - or even economic stagnation - if nothing is done to boost the economy.

Anonymous said...

For comparative figures from an independent source on Government debt as a percentage of national GDP, try Table 1 in this Lloyds TSB Economics Weekly from 26 November last year:

The poster with the baby reminds me of how Abraham Lincoln once put it:

In a democracy, you can fool all of the people some of the time and some of the people all the time but you can't fool all the people all the time.

He might have added, wise man that he was, that what really matters is whether enough people can be fooled to win a majority of MPs in a general election.

Anonymous said...

Dads nose, Gordon Browns eyes, Gordon Browns debt would have been even worse!