Just heard Gideon saying the deficit has shrunk, is this actually true?

Yes. But they haven’t reduced it by as much as they originally planned to. The current forecast doesn’t show it being eliminated until 2018.

BBC Summary

Shrunk?

Surely ‘reduced’ would be a better word, if in case it is true, as we are only talking about the deficit and not the actually debt.

The debt has actually increased….

Edit: too slow or typed too much

Note also the difference between deficit and debt.

The Tories* are spending more than they have as a government but have slightly reduced the amount they are overspending by.
Of course debt relative to GDP (which governs our ability to pay off debt) also looks bad, but that’s because they’ve failed to engineer a decent recovery.

So would it have been any better under Labour? Of the available answers (yes, no and who knows) the only sensible one is probably who knows – but don’t let that stop the clairvoyants telling you otherwise.

*yes I know the LibDems are culpable too, but it seems cruel when they have so many other problems of their own.

“They didn’t actually believe you, did they?!!!!”

Ah ok in plain english what is the difference between the deficit and debt?

Edit IGM has kind of answered my question.

They deliberately talk about “eliminating the deficit” as people think that means paying back the debt that’s already accrued, when what they actually mean is stopping the debt getting any bigger, so if there’s still a deficit it means those fiscally responsible Tories are still spending more than is coming in.

To be fair getting tax receipts higher than spend is step one in reducing debt.

Or you can go for inflation to reduce the relative size of the debt.

So would it have been any better under Labour? Of the available answers (yes, no and who knows) the only sensible one is probably who knows – but don’t let that stop the clairvoyants telling you otherwise.

Trust me…. when it comes to economic matters, I really know what I’m doing. This guy taught me everything I know……

Ah ok in plain english what is the difference between the deficit and debt?

Say we’re a million in debt now. Running at a deficit means this year we receive 50 million and spend £51 million, so next year we’re 2 million in debt.

Eliminating the deficit next year, we receive £50 million and spend £50 million (so no deficit) but we’re still £2 million in debt.

Think about having a balance on a credit card and you’re only making the minimum payments, so the interest is covered, but the debt isn’t being paid down.

Debt is what the country owes

Deficit is the difference between what we got coming in and going out, more out than in is deficit

If you have a deficit then it implies that your debt is increasing.

Well if there’s a deficit then how can the debt decrease ?

They deliberately talk about “eliminating the deficit” as people think that means paying back the debt that’s already accrued

Only stupid people. It’s actually rather more useful to discuss the deficit than the debt in terms of management of the economy.

Well if there’s a deficit then how can the debt decrease ?

Well the real value of the debt could still decrease 😉

Rate of change of national debt increase has gone down (but isn’t negative as we do not have a surplus).

Say we’re a million in debt now. Running at a deficit means this year we receive 50 million and spend £51 million, so next year we’re 2 million in debt.

That’s too simplistic, isn’t it? As well as new borrowing, the deficit also includes any existing debt falling due and that requires re-financing.

National debt’s often looked at as a percentage of GDP, rather than as an absolute, since obviously large debt is less worrying for a large, strong country- a pound of debt is a massive issue if you earn a penny a year, not so much if you earn a tenner a year. So if you grow the economy faster than the debt it’s generally seen as being similiar in effect to reducing the debt.

Ironically, Labour reduced both the deficit, and the debt-to-GDP ratio, up til 2008. Obviously shit then hit fan

….That’s too simplistic, isn’t it?

remember your audience here largely still think “poo jokes” are funny and that rude witlessness passes as “banter” 😆

They deliberately talk about “eliminating the deficit” as people think that means paying back the debt that’s already accrued, when what they actually mean is stopping the debt getting any bigger

You didn’t notice Balls the other day pledged to ‘eliminate the current account deficit’ rather than ‘eliminate the deficit’

Note the subtle but vitally important difference…

Ironically, Labour reduced both the deficit

hmmmm……

I like these threads. I’ve missed them. 🙂

hmmmm……

take you facts back with you Troll, this was a perfectly reasonable thread before you came on here spoiling it!

Hmmm, Labour government or Tory government?

It’s like asking whether you want to sever your left testicle or your right testicle with a pair of rusty pliers…..

So Brown started well, then got a bit carried away and realised the mistakes he’d made so started to get things in the right direction again. Along comes Darling and things start to go completely haywire. Was this due to:

A: his incompetence?
B: pressure from Brown to win votes with pay rises and other schemes that were financial suicide?

Actually quite impressed that Osbourne seems to have cut the deficit by about a third!

A Guardian reader Mr Stoner?

Hmmm, Labour government or Tory government?

It’s like asking whether you want to sever your left testicle or your right testicle with a pair of rusty pliers…..

Would sir like his huge shit sandwich on brown or white bread? Actually, I reckon we decide by who looks the biggest twonk while delivering their conference speech….

Hmmmmmmmmmmmmmm

Was this due to:

A: his incompetence?
B: pressure from Brown to win votes with pay rises and other schemes that were financial suicide?

No it was a world wide financial crisis, surprised you didn’t notice it.

Stoner – Member

hmmmm……

Fair point, treasury stats have it still in deficit while your graph shows it in surplus, but it depends on how you measure.

A ^former Guardian reader Mr Stoner?

I still take the saturday edition. But stopped my weekday subscription when they sacked all their decent international journalists because like any good left wing outfit they ran out of someone else’s money (Scott Trust) 🙂

But dont worry, deep-pocketed-leftie-fans-of-Islington! You can now personally help pay for Mr Rusbridger’s new piano and £400k salary 🙂

http://www.theguardian.com/membership

but it depends on how you measure.

v true. I was just taking an easy pot shot.
It doesnt really matter who’s running the show, there’s a big hole still to fill (c.£75bn IIRC), and pratting about with £100m here or there for a pet niche of the electorate isnt going to fix it.

“No it was a world wide financial crisis, surprised you didn’t notice it.”

So what’s the excuse for the 5 years of increasing deficit before that happened – given that other major economies were not increasing their borrowing?

Stoner’s numbers (looks like a Guardian pice to me, come on own up closet lefty – edit: apologies I missed your confession above) do seem to suggest there’s nothing to choose between Labour and Tory, but global financial melt downs are bad under any administration.

In other news, Pope still…

Labour inherited a strong economy as you can see from the lead in on that graph. The Labour got carried away with spending in a strong economy instead of running a surplus as should be the case in such times. So when things went bad they went really bad.

Odd that Gordon Brown didn’t get ribbed for opting not to use his first name, James, while George Osborne does for opting not to use Gideon.

They deliberately talk about “eliminating the deficit” as people think that means paying back the debt that’s already accrued

Only stupid people. It’s actually rather more useful to discuss the deficit than the debt in terms of management of the economy. [/quote]

Yes, stupid people. Stupid people who have votes. Or to be slightly less harsh, fiscally illiterate people, of whom there are a great many, a lot of whom you wouldn’t necessarily describe as “stupid” in general…

Labour inherited an economy in deficit, took it into surplus, then back into deficit, then the worlds finances collapsed and the deficit rose hugely as world governments had to bail out financial institutions and major companies, the tories inherited the economy at the bottom but haven’t made that much impact on the deficit for the pain they have inflicted.

FWIW, the IMF concluded that the UK’s increase in national debt was mostly because of the damage to output, rather than government spending. The direct cost of the bailouts were relatively small.

Whether you want to trust the IMF is another question of course, though they’re usually skewed towards austerity rather than stimulus.

Stoner’s numbers (looks like a Guardian pice to me, come on own up closet lefty) do seem to suggest there’s nothing to choose between Labour and Tory

That kind of depends how you read them, given there was a recession in the early 90s, but not in 2005

Odd that Gordon Brown didn’t get ribbed for opting not to use his first name, James, while George Osborne does for opting not to use Gideon.

Yeah, I mean what sort of sensible reason might there be for a public figure to choose not be called “James Brown”?

Or Tony instead of Miranda 😉