Deficit growing again...

HAMISH_MCTAVISH

UK public sector net borrowing was £14.4bn in August, the Office for National Statistics has said, the biggest deficit for the month since records began.

The figure was marginally higher than for the same month last year.

Corporation tax receipts fell by 2.1% and benefits payments rose 4.9%.

The figures make it more likely that the government will fail to achieve its aim of wiping out the structural budget deficit by 2015.

http://www.bbc.co.uk/news/business-19672660

Oooops.

But seriously, trying to cut your way out of a recession was never going to work.

Still, at least now we know the price of Tory ideology.

£14.4 bn in August alone.

Rotor

Because the deficit would be lower if only the govt. had spent more money?

HAMISH_MCTAVISH

Rotor wrote: »

Because the deficit would be lower if only the govt. had spent more money?

I know you find it hard to understand, but yes, that is more than likely the case.

When you try to cut your way out of a recession, instead of investing for growth, we end up where we are today.

Back in a recession, having choked off the recovery thanks to ill-conceived and poorly targeted cuts, with tax revenues falling and benefits bills increasing.

With the wholly predictable result being the deficit worsening instead of shrinking.

chewmylegoff

There is always a deficit in August...

Masomnia

So why was the deficit revised down for last fiscal year from £125 billion to £119 billion, thus beating the target by £7billion? If cutting can't work?

It was £155billion pre-austerity, for comparison.

How many examples of governments increasing borrowing to get out of a debt crisis are there in the past?

Graham_Devon

Passed the £1tn mark this month.

What stood out for me was the tories stating that you shouldn't look at one months figures, and labour shouting from the rooftops about one months figures.

In 2008, the tories shouted from the rooftops about one month figures, while labour stated you shouldn't look at one months figures.

homelessskilledworker

HAMISH_MCTAVISH wrote: »

http://www.bbc.co.uk/news/business-19672660

Oooops.

But seriously, trying to cut your way out of a recession was never going to work.

Still, at least now we know the price of Tory ideology.

£14.4 bn in August alone.

Oh Dear,

so you come from the Ed Balls school of economics, borrow heavily in the good times and also borrow heavily in the bad times.

And besides, £375 Billion has now been pumped into the system in the way of QE, what more could you want

HAMISH_MCTAVISH

chewmylegoff wrote: »

There is always a deficit in August...

But there's not always a "record deficit" in August...

purch

HAMISH_MCTAVISH wrote: »

When you try to cut your way out of a recession, instead of investing for growth, we end up where we are today.

Hamish, the time spans in economics are far longer than the period the current Government has been in power, and far longer than your attention span.

The Fixed Investment Cycle (Juglar Cycle) is considered to be 7 to 11 years.

If the Government had chosen to spend our way out of recession, after 2-3 years of the cycle the deficit have certainly risen far more than these current numbers, long before any positive results would have been seen.

By all means advocate a different long term strategy for the Government, but don't make yourself look an idiot by trying to suggest the deficit would be lower after only 2 years of this Government being in power if they had decided on a different course of action.

chewmylegoff

HAMISH_MCTAVISH wrote: »

But there's not always a "record deficit" in August...

The deficit in August last year was £14.37bn so it's a record in nominal terms by £0.04bn or £40,000,000. So it is 0.3% higher than this time last year with inflation running at 3%. In real terms it is not a record deficit at all...

kabayiri

Interesting to note that Steph Flanders article puts part of the problem down to increased pay rises to public sector personnel, at the expense of decreasing numbers of staff.

This seems quite at odds with Union portrayals of savage attacks on their members.