I am sick of seeing the inherited debt LIES that the tories are still telling, despite being rebuked by the OBR, same tory government that borrowed more in 3 years than labour did in 13... After continuously LYING the UK had the biggest debt in the world, George Osborne admitted to the Treasury Select Committee that he did not know the UK under Labour had the lowest debt in the G7... Also, confirmed by the OECD. Those who have used cash terms (instead of percentages) have done so to scare, mislead and give less than half the story. The much banded about 2010 deficit of over 11% is false. This is the PSNB (total borrowings) and not the actual budget deficit which was -7.7% - (See OBR Economic and Fiscal Outlook March 2012 page 19 table 1.2.) Secondly, in 1997 Labour inherited a deficit of 3.9% of GDP (not a balanced budget ) and by 2008 it had fallen to 2.1% - a reduction of a near 50% - Impressive. Hence, its implausible and ludicrous to claim there was overspending. Its common sense, in cash terms a millionaires debt would be greater than most people. Therefore, the UK would have a higher debt and deficit than most countries because, we are the sixth largest economy. Hence, its laughable to compare UKs debt and deficit with Tuvalus who only have a GDP/Income of £24 million whilst, the UKs income is £1.7 trillion. Labour in 1997 inherited a debt of 42% of GDP. By the start of the global banking crises 2008 the debt had fallen to 35% - a near 22% reduction page 6 ONS. Surprisingly, a debt of 42% was not seen as a major problem and yet at 35% the sky was falling down.... The deficit was then exacerbated by the global banking crises after 2008. See HM Treasury. The IMF have also concluded the UK experienced an increase in the deficit as result of a large loss in output/GDP caused by the global banking crisis and not even as result of the bank bailouts, fiscal stimulus and bringing forward of capital spending. Its basic economics: when output falls the deficit increases. Finally, the large loss in output occurred because the UK, like the US, have the biggest financial centres and as this was a global banking crisis we suffered the most. and not as a result of overspending prior to and after 2008- as the IMF concur.
Posted on: Tue, 30 Sep 2014 23:24:31 +0000
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