Umm, no, this doesn’t add up I’m afraid Mr. Balls

Ed Balls will say in a speech on Saturday that the party will clear the £86  billion deficit in current budget spending by 2020 if it wins the next general election.

The shadow chancellor will make a “binding fiscal commitment” that a Labour government will balance the books as soon as possible after 2015 and by May 2020 at the latest.

How lovely: but look behind the curtain children:

The party will hit its target by measures including removing the winter fuel allowance from pensioners who pay the higher rate of tax. It will also use proceeds from the sales of government stakes in Lloyds TSB and the Royal Bank of Scotland.

Balancing the current deficit with capital receipts?

Isn’t that “selling the family silver”?

37 thoughts on “Umm, no, this doesn’t add up I’m afraid Mr. Balls”

  1. And this on the same subject from the BBC website:

    This would mean eliminating the deficit – so the government generates more cash than it spends – and cutting debt as a share of GDP between 2015 and 2020.

    Makes me feel like grabbing the person who wrote that round the throat and screaming “the Government doesn’t generate cash, you moron, it takes it!”.

    Definitely not good for the blood pressure this early in the morning.

  2. So Much For Subtlety

    One of the interesting side effects of the death of Protestant Britain, and hence of Fiscal Conservatism, is that if the Tories lose, as they deserve to, and Labour is left with a British economy little better than what they handed Cameron, they will have to decide what to do next.

    But if the Tories refuse to play the Repair-The-Damage-Labour-Leaves game by, basically, not being Tories any more, what can Labour do? Do they become another Party of Slightly-Tarnished-Rectitude as Red Ed seems to suggest? I think not. I think they will double down on their idiocy and go the Argentinian route. We will get run away inflation and a general economic collapse. Which they will blame on the Americans or the Jews or maybe Jewish Americans. Perhaps just Charles Saatchi. He seems to be a convenient target these days.

    Otherwise how will we know which set of lizards not to vote for?

  3. Watch Ritchie call for a diaspora tax in response to this, to tap us overseas Brits up to pay for spending in a country in which we don’t live. Or has he finally shut up about this now?

  4. So if using capital lump sum to not borrow in one year, possibly an election year, is that enough to meet the promise? And will such a sale take place after Labour get in?
    From what I recall before now Balls has said how he will spend money next parliament that this parliament has already received in full!

  5. SMFS

    On the subject of ‘blame the Jews’. On an office social I was regaled with this wisdom by two highly placed colleagues in full public hearing:
    Why, I asked, if America is only interested in oil, does it support Isreal?
    Because all US politicians are bought and paid for by the Zionist lobby.
    No, say it as you mean it: Jewish. But how can they be if Jews form such a small part of the electorate, much smaller than WASPS or Catholics or Hispanics or even Blacks?
    Because the Jews have got the money and they use it to buy influence behind the scenes.
    I’m sorry this doesn’t make sense to me. They came on boats like everyone else, penniless like everyone else. Why does this small group suddenly. Have so much money it can buy US elections?
    Because they’re clever, don’t you see?
    These are the same arguments the Nazis used.
    Oh that’s ridiculous!
    Those guys have gone back to being regarded in the office as perfectly respectible; I was heavily criticised for ‘personalising’ the conversation.

  6. Not all individuals arrive penniless, not all individuals remain penniless. Not all families failed to transfer cash and assets between family members.
    Elections are expensive to buy, influence by regular donations and support not so much. If locally a congresscritter is supported by donations of $100,000 a year to campaign fund and support at events then there will be some influence…

  7. What Labour should have done from day one is nail the lie that Gordon Brown caused the international financial crisis starting with the American banks collateralising no-recourse mortgages which the usual crooks transformed into: Gordon Brown over-spent on welfare .(In fact the deficit racked up because government receipts went down not the other way around: Brown had acquired a record for prudence until hit by a shit storm not of his making.Thereafter he “saved the world” by keeping the banks open and persuading other world leaders to do likewise..

  8. Because all US politicians are bought and paid for by the Zionist lobby.

    The actual question should be “why does the small, albeit relatively wealthy, Jewish lobby in the US have such disproportionate political influence?”

    Compared, say, to the overtly louder, much larger and even have a President*, Black lobby? I suspect the answer is something like “Good organisation and plenty of mensch, hey?” Hollywood probably doesn’t hurt either, although the money there was got a bit goyish recently.

    * Goldwater was, in terms of the popular vote, the least successful Presidential candidate ever.

  9. SE

    My view is that ‘clever’ is something to be proud of. So I’m comfortable calling Jews clever. And if the Jews of the world have sustained a belief in education and trade through Millenia of progroms and expulsions, then again they should be proud.
    However, I object strongly to the dirty lie that they form some sort of homogenous grouping who all implicitly ‘get’ which candidate to support to extend their influence. I aslo object strongly to the idea that the people of the nation that is built on the Rights of Man, that offered a refuge to Europe’s dispossed, that uniquely understands the need for commerce, that went to the moon, that they could be so stupid as to be taken in by ‘the Jew’. No! Europeans are stupid; not Americans.

  10. The shale gas revolution is just round the corner, Balls knows this, and just like Maggie did with North Sea Oil he’ll use the windfall to finance his policies and mark it off as genius chancellorship, this is pre-empting the win.

  11. Can see Balls putting company taxes up to make them ‘pay their fair share’ (thats probably about £15k a year each). Cannot see him being a good chancellor, his track record to date with posts doesn’t fill me with confidence.

  12. DBC Reed said: “Brown had acquired a record for prudence until hit by a shit storm not of his making.”

    No he had not. He had acquired a record for double and triple counting and plainly undertook deficit spending after Labour won the 2001 election. It is far from prudent to claim to have abolished boom and bust and crow about a steadily growing economy when the reason for that is an extra £20-40 billion a year. It was a pattern of spending that would be appropriate in a recession while denying that one was happening.

    2004: OECD warns on UK budget deficit

    2010: Deficit, national debt and government borrowing – how has it changed since 1946?

  13. @ DBC

    Only idiots are saying that Gordon caused the crisis through public spending… so in any vaguely intelligent company, that’s a straw man.

    Gordon contributed to the crisis by being drunk on the credit boom.. just like the guy before him, and the one before him, and etc etc. He did, I think, make himself look slightly sillier than his predecessors with his ‘end of boom and bust’ bragging.

    His public spending is open to criticism (in respect of the ‘crisis’) because of it’s profound unkeynesianism.

  14. And Balls is claiming that he would introduce a 10p tax rate. Wasn’t he and Miliband behind the abolition of just such a rate under Brown?

  15. @ Henry Crun

    Yes. Abolishing it was the right thing to do, but they screwed up by not shifting other bands to ensure low earners weren’t worse off.

    Bringing it back is idiotic political bullshit because Labour are too stubborn to admit that the raising of the personal allowance is the right policy. I suppose it must be quite embarrassing for them to see a Tory chancellor reversing a decade of their dragging the low paid further and further into the tax system… even if it was a LibDem policy.

  16. Don’t think the winter fuel allowance of say 10% of pensioners is going to save £100 billion (probably £200 Million tops) so its up to the banks to be not just solvent but an enormously successful cash cow. Glad Ed can promise that.

  17. Henry Crun said: “And Balls is claiming that he would introduce a 10p tax rate. Wasn’t he and Miliband behind the abolition of just such a rate under Brown?”

    By then (2007) Miliband was minster for the third sector or something like that. Brown removed the 10p rate for political motivations in order to proclaim Labour had lowered the basic rate of income tax to 20% in the run up to the 2007/8 election that never was.

    The 10p rate had been introduced by Brown several years earlier for equally political reasons – to crow about Labour being responsible for the lowest rate of income tax in modern times.

  18. SMFS,

    But if the Tories refuse to play the Repair-The-Damage-Labour-Leaves game by, basically, not being Tories any more, what can Labour do? Do they become another Party of Slightly-Tarnished-Rectitude as Red Ed seems to suggest?

    Red Ed? Seriously, do you think there’s much clear water between him and Cameron?

  19. On nailing the Lie or sticking the tail on the pig ,it is best to remember that Osborne and Cameron were anxiously pledging to match Labour’s spending plans in September 2007 just as Lehman’s was going bust( In the USA some might remember.)If not for Lehman’s and the big unravelling, the Tories would have carried on with the same spending as Labour.

  20. @ DBC Reed
    “Osborne and Cameron were anxiously pledging to match Labour’s spending plans in September 2007”
    Yes, but that was before they got a sight of the *real* books

  21. Gordon Brown contributed to the crisis by changing the rules on how banks account for potential future losses so that they significantly overstated profits and paid more corporation tax, thereby concealing the extent to which the Labour government was overspending its income. The overstatement of profit also resulted in paying excessive bonuses, most of which have not been recouped, thereby reducing the banks’ core capital (and also increasing Treasury receipts from higher rate tax on said bonuses).
    Brown’s “record of prudence” only lasted as long as Blair got him to stick with his 1997 election promise to match Ken Clarke’s spending plans and even then it was false because he continually fudged the figures by bringing forward tax receipts due in future years and counting them towards current year’s income..

  22. @DBC
    Quite agree the Tories were falling over themselves to match Labours spending plans.
    Sadly, all this proves is that they were as stupid as Gordon Brown.
    While the recession did indeed completely stuff the budget, some time prior to that, it was apparent to anyone with half a brain(not that there are many of them on either side of the commons) that Gordon was runing a fair sized deficit while the good times rolled, and mostly to fund day to day spending rather than one off investment.
    If we could get rid of that part of our current deficit that we inherited from Gordon’s idiocy while the good times rolled, the current situation would look at good deal prettier.

  23. So Much For Subtlety

    Ironman – “Because all US politicians are bought and paid for by the Zionist lobby. No, say it as you mean it: Jewish. But how can they be if Jews form such a small part of the electorate, much smaller than WASPS or Catholics or Hispanics or even Blacks?”

    Well there is a Zionist lobby in America and it is powerful. But not because it is Jewish. It is powerful because so many White American Protestants are firmly pro-Israel. It is not a Vast Jewish Conspiracy. It is an alliance of Jewish money, Jewish brains and White, Evangelical and Southern votes.

    “I’m sorry this doesn’t make sense to me. They came on boats like everyone else, penniless like everyone else. Why does this small group suddenly. Have so much money it can buy US elections?
    Because they’re clever, don’t you see?
    These are the same arguments the Nazis used.”

    But they are interested in education. They are hard working. More so than the rest of the White population. Jewish Americans are the richest community in the US. This is perhaps difficult to explain because of the legacy of anti-Semitism, but Chinese communities across South-East Asia also arrived dirt poor. And they worked much harder than the locals. And now they are rich.

    The Jewish American community is slowly displacing the WASPs from positions of power across America. They are America’s new ruling class. You can see that in the recent Bank crisis. Was any of those banks run by non-Jewish people in America? Even the NFL is running by Jewish Americans these days. And why not? After all, America is a meritocracy of sorts.

    Ironman – “However, I object strongly to the dirty lie that they form some sort of homogenous grouping who all implicitly ‘get’ which candidate to support to extend their influence.”

    Well the cliche goes if you get twelve Jews in a room, you get thirteen opinions. And certainly Jewish Americans show a very wide range of political opinions – from Trotskyites (where they have always been disproportionately represented) to neo-Cons. But you can look at Jewish voting patterns in the US. It certainly looks like they get which candidate to support as the Jewish vote is all but welded on to the Democratic party.

    “I aslo object strongly to the idea that the people of the nation that is built on the Rights of Man, that offered a refuge to Europe’s dispossed, that uniquely understands the need for commerce, that went to the moon, that they could be so stupid as to be taken in by ‘the Jew’. No! Europeans are stupid; not Americans.”

    Taken in? That is an interesting phrase. I think the Evangelical’s love of Israel is entirely one-sided. I don’t think Jews love them back in any real numbers. You can see the utterly relentlessly hostile treatment Evangelicals get in anything written or produced by Jews these days. Jews will not vote for their candidates. So have they been taken in? I wouldn’t say so. But I think they are a little naive there.

  24. So Much For Subtlety

    The Stigler – “Red Ed? Seriously, do you think there’s much clear water between him and Cameron?”

    Sorry but that was my point. I did not make it clearly enough. There is no clear water between them. Between any of the main political parties actually. We have three Lib-Dems. And they all share the same Augustinian approach to deficits – give me Fiscal Rectitude Lord, just not yet. They are all promising to balance the books within the next economic cycle, or in time for the next election, whichever comes first. But not *this* election.

    So how can Red Ed distinguish himself? Make his “brand” stand out from the crowd? I think by going the Argentinian route. He has no real choice.

    Although the more interesting politics is that of Scotland. There the SNP and the Labour Party have even more in common. A lack of fiscal discipline. A belief in the State. A hatred of the English. Which one will be inevitably pushed into being the party of relative fiscal rectitude? I think it might be the Labour Party. Which means if their policy is Argentinian, what the hell will be the SNP do?

  25. SMF

    I am happy to lump the Jew in with the Chinese (and the Indian in the UK and Africa).

    If any group commits itself to hard work and education then I support it.

  26. So Much For Subtlety

    Ironman- “I am happy to lump the Jew in with the Chinese (and the Indian in the UK and Africa). If any group commits itself to hard work and education then I support it.”

    Amy Chua beat me to it – she wrote a book called World on Fire which I recommend wholeheartedly. She refers to Market-Dominant minorities, meaning the Chinese of South-East Asia, the Indians and Lebanese of Africa, the Jews of Europe.

    What I think is interesting is how well those minorities do in other populations. And how poorly they do when they are in a majority. Look at China, India and Lebanon. Or even Israel which despite massive US aid has had a pathetic economic performance from 1949 to the 1980s or so.

    Generally speaking I tend to support hard work and an interest in education. But maybe some people take it too far. Amy Chua also wrote her Tiger Mother book. It is odd that the industrial revolution and the rise of modern science did not take place in any of those market-dominant minority communities, but among Europeans who tend to be a bit lazy and not much interested in education on the whole.

  27. So Much For Subtlety

    Ironman – “If any group commits itself to hard work and education then I support it.”

    I think that perhaps there is a point there that needs to be made. The issue is not whether you support them or not. I think that White Liberal Westerners have not yet come to accept the obvious fact – they are increasingly powerless minorities. The days when all that mattered is what we thought have passed. The question we should be asking is not what we think about them, but what they think about us.

    And if I were a White Evangelical in the US, I would be concerned that the ethnic group that is increasingly over-represented in the ruling class contains so many people who so clearly hate me and everything to do with me. While at the same time Whites are well down the path to being an actual minority in the US.

    But perhaps that is over-stating it. As did this gentleman today:

    http://www.dailymail.co.uk/news/article-2545918/Criticism-super-rich-like-Holocaust-says-Silicon-Valley-billionaire-WSJ-letter-sparked-outrage.html

    I do like the response from the Left:

    Kaili Joy Gray wrote on the Wonkette blog: ‘The parallel of Nazi Germany and some people getting kind of annoyed by the tech bro dudes is exactly ZERO.’

    So she responds to an over-the-top parallel by language that demeans an entire class, and gender, of people? Ironic really.

  28. “What I think is interesting is how well those minorities do in other populations. And how poorly they do when they are in a majority. Look at China, India and Lebanon. Or even Israel which despite massive US aid has had a pathetic economic performance from 1949 to the 1980s or so.”

    Could this be because the tribalism & clannishness of some groups works well in mercantile situations where the group is a minority. A tendency to favour one’s own group, networking etc, provides a competitive edge. Yet the service provided still benefits the wider society. But the same tendency provides a hindrance when the group is a majority because it limits the contributions of outsiders.

  29. DBC Reed said: “On nailing the Lie or sticking the tail on the pig ,it is best to remember that Osborne and Cameron were anxiously pledging to match Labour’s spending plans in September 2007 just as Lehman’s was going bust( In the USA some might remember.)If not for Lehman’s and the big unravelling, the Tories would have carried on with the same spending as Labour.”

    In the run up to a (bottled) election it is expedient to claim you will stick to the current government’s spending plans.

  30. @G
    Expedient, but not, in the long run, doing much for the credibility of Tory economic policy.
    Good to see that Ed B has come out fighting and defended the pre-crash spending policies of Gordon Brown’s Labour Party even saying that these policies did not cause the International Banking Crisis of 2008 ,something which the LP’s opponents have repeated so often they might almost have begun to believe it.Ed B will have to devise an irritating hand signal to use when the Bullingdon Buffoons trot out this latest Big Lie. (There are people who still believe one of the many previous ones, that the unions caused inflation, despite being well and truly disabused of the notion by Enoch Powell of all people ,who called the unions “as innocent as new born lambs”)

  31. @ DBC Reed
    No the public sector unions did not create hyperinflation in the 1970s, it was just the massive pay increases handed to them by Wilson.
    Are you saying that Wilson would have handed out 100% pay increases if they did not ask for them?

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