Labour's continual calls for the Govt to spend more

Old_Slaphead

ILW wrote: »

I believe we have always had a debt, but it has not been increasing each and every year.

I stand corrected. I thought we'd always run a budget deficit too but apparently for about 3 of the last 30 years we haven't (the last small surplus being around yr 2000)

Old_Slaphead

RJP33 wrote: »

Didn't we steeply increase borrowing in the couple of years before the crisis hit, after years of reducing the debt?

Put us in a much more difficult position, as Keynes said the best time for austerity is in the boom.

But they were the days when borrowing 45% of GDP was considered wildly extravagant.

chewmylegoff

Old_Slaphead wrote: »

I stand corrected. I thought we'd always run a budget deficit too but apparently for about 3 of the last 30 years we haven't (the last small surplus being around yr 2000)

the last budget surplus in 2000 (or whenever it was) was as a result of one-off exceptional revenue from selling 3G licences - if you strip that out (as you would when considering the underlying profitability of a company) then we ran a deficit in that year. i expect the previous surpluses came as a result of exceptional income from privatisation of assets.

ILW

chewmylegoff wrote: »

the last budget surplus in 2000 (or whenever it was) was as a result of one-off exceptional revenue from selling 3G licences - if you strip that out (as you would when considering the underlying profitability of a company) then we ran a deficit in that year. i expect the previous surpluses came as a result of exceptional income from privatisation of assets.

So does that mean thet the debt has increased virtually every year for the last 30 years or so. Sounds crazy to me.

Suppose it just had to fall over at some point.

chewmylegoff

ILW wrote: »

So does that mean thet the debt has increased virtually every year for the last 30 years or so. Sounds crazy to me.

yes, in absolute terms. but not as a % of GDP.

you could quite happily run a deficit forever as long as your debt wasn't increasing faster than your ability to service it.

ILW

Cannot help thinking it would have been nice if we had been sitting on a decent reserve when the stuff hit the fan. Bit like having a decent chunk of personal savings to tied you over the sticky times.

StevieJ

chewmylegoff wrote: »

yes, in absolute terms. but not as a % of GDP.

you could quite happily run a deficit forever as long as your debt wasn't increasing faster than your ability to service it.

Good point, as far as I can remember the deficit as a % of GDP was lower in 2007 (before the credit crisis officially struck) than it was in 1997 when the Tories were previously in power. Wow check this out, we appear to be in a period of fiscal austerity since Brownie put his fingers in the Exchequer pie, is this confirmation of that much used phrase "Lies, damned lies, and statistics"

http://www.ukpublicspending.co.uk/uk_national_debt_chart.html