Mr. Chakrabortty lies with numbers

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Oh well done!

Start the graph at 38% of GDP why don\’t you?

Drawing on IMF figures published last week, the graph compares what will happen to government spending in Britain up to 2017 with the outlook for Germany and the US. And what it shows is that the UK will plunge from public spending on a par with Germany in 2009, to spending less than the US by 2017.

And then use figures for the US which are vastly, gargantuanly, over normal.

And here is a much more useful little chart:

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Can\’t really see that government as 40% of GDP is anything out of the ordinary myself. Indeed, it would appear that we\’d be returning to the levels of 2007. Quelle Horreur, eh?

12 thoughts on “Mr. Chakrabortty lies with numbers”

  1. There’s absolutely nothing wrong with compressing the scale for graphs where all figures are within a narrow range, unless (in the style of Lib Dem electoral literature) you actually lie about relative positions. People who claim otherwise are mad pedants who’d sacrifice legibility for principles that don’t even have any basis.

    The economic point that is important here is that all three countries have seen public spending rise in the crisis, for obvious auto-stabiliser-plus-bailout reasons, but that the UK plans to cut spending much faster than the US or Germany. The chart makes this point very effectively.

    Tim adds: John, that’s simply not what Chakrabortty is arguing:

    “Strip away the usual economic and financial alibis for such drastic austerity and what you’re inevitably left with is a purely political motive: namely, a desire to transform the British state from being recognisably European, with continental levels of public spending, to something sub-American in its miserliness.”

    He’s not at all arguing about the speed of reverting to pre-crisis spending. He’s talking about the definitive attempt to shrink the state. Back to, horrors, the level of 2007.

  2. Worth noting that graph looks roughly the same as the forecast for spending in Darling’s last budget, which had current expenditure falling from 44% of GDP in 2010-11 to 39.8% of GDP by 2014-15. (The graphs above probably include investment spending too, adding a % or so to current spending)

  3. Worth pointing out that there isn’t a cat in hell’s chance of public spending falling to below 40% of GDP in 2017.

    And didn’t even Gordon Brown think that public spending should remain below 40% over course of economic cycle ?

    Keynes thought 25% was the ideal. But I think we can all agree that that was in the olden days and that the size of the state is likely to increase over time with greater longevity and the costs that that imposes (health & pensions).

  4. “size of the state is likely to increase over time with greater longevity and the costs that that imposes (health & pensions).”

    That’s only because state involvement in pensions was ill-conceived.

  5. He’s not lying, exactly, but he’s making an awful lot out of not very much. He’s claiming that a drop of 3% in Government spending from the 2007 level will turn us into some miserly beggar state (and, incidentally, implying that the US is already a miserly beggar state, which is frankly ridiculous).

  6. CHF

    Do you mean direct state involvement in pensions (i.e. the state pension) or indirect involvement (tax relief on private/corporate pensions, rules requiring pension funds to purchase “safe” assets i.e. gilts?)

    There isn’t any form of pension provision that doesn’t involve the state.

  7. Funny how he starts his graph at 2009, the year of massive bank bailouts and stimulus projects.

    Regardless of the spin Chakraliar puts on the figures, perhaps this is government spending returning to normal?

  8. Chakrabortty’s chart seems to match the IMF’s data here.

    Comparisons of government expenditure between countries are difficult. Healthcare, pension, and education costs may appear in government spending to differing extents.

  9. what it shows is that the UK will plunge from public spending on a par with Germany in 2009, to spending less than the US by 2017.

    39.167%, UK
    39.387%, USA

    lawks.

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