Zoe Williams tries to explain economics to us

And fails, dreadfully.

To edge back a step, our deficit was nothing like Canada\’s either. Theirs had been rising steadily since 1974, and had got to 70% of GDP. Ours was 30% before the financial crash, a figure that is manageable, almost respectable.

The deficit isn\’t 70% of GDP, it wasn\’t 30%.

That\’s the National Debt.

If you can\’t, reliably, work out the difference between a stock and a flow sorry, but you really ought not to be speaking of what you don\’t know.

8 comments on “Zoe Williams tries to explain economics to us

  1. I guess someone pointed out the error. The piece on the Guardian website now reads:

    “… our deficit was nothing like Canada’s either. Theirs had been rising steadily since 1974, and debt had got to 70% of GDP…..”

    Someone has slipped the word “debt” in there ….

  2. UK national debt was 30% some time before the crash yes but, not just before the crash. Unless you count Labour winning the 2001 election as the start of it.

    Besides which, the figure when things were okay isn’t relevant especially when the figure today is somewhere around double that.

    It would be nice of the protagonists on either side of the cut or not to cut argument stopped pissing about with their very own phoney war. The deficit needs dealing with. The debt needs attention. Government wastes shitloads of money and the increasing debt interest payments will see funding for services diminish. That is the reality.

    Pretending that Government spending is going down is silly – it is not going down but the proportions spent on services and servicing debt are changing. Pretending that Government spending can be maintained is silly – we had deficit spending in the good years and even bigger deficit spending in these lean ones ffs. Who are all these silly people and in the case of silly MPs who are the silly voters voting for them?

    That’s before you move onto ideological issues such as the State being too big or not big enough, being too centralised or not central enough, distorting the private sector by sucking money from it and crippling productivity on the altar of eco-wibble, etc.

    Where have all the grown-ups gone?

  3. Ours was 30% before the financial crash, a figure that is manageable, almost respectable.

    It was only respectable amongst those who were cheer leading the Labour government when it was hosing money on the public sector.

  4. I was arguing with some demented lefty on a forum recently who was insisting that the bank bailouts which took place in 2009 are the main contributor to the current budget deficit. Never underestimate the degree to which people who don’t understand terminology are prepared to argue about their effects.

  5. I don’t wish to be a pedant but…

    When you say “national debt” do you really mean “public sector net debt”?

  6. Gareth // May 19, 2011 at 10:52

    The cost of servicing our public debt is still relatively low.

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