there was a structural deficit as the lab govt decided to spend it way out of recession [ as did all govts really]. The argument is no one has any money but spending will stop a huge depression/slump and make you better off in the long run – for exampe debt wil be a lower % of gdp as GDP rises. It also assumes the income will rise for govt as they get more taxes and pay out less in benefits for example. In a depression givt income drps but expenditre tends to increase – reduced taxation increased benefits for example. The current govts views is we need to slash everything or we will become Greece and private enterprise will save us by taking up the slack / employing displaced public service workers. Unemployment figures and the revision of growth rates downwards means it will be a few years before we can be sure of the actual affect of this. Personally I think they are politically motivated but they obviously wont admit to this whilst telling us there is no alternative as if we coud not raise taxes [ lower than the EU averarage by 4%} or reduce slower.
would you prefer something a bit more ranty where I called bankers name and eulogised one sides economic strategy?
