Oh dear, accountant cannot add

How much have we paid? Any figure will be an estimate but there’s an easy way to guess. In the years 1998 to March 2008 the Labour Government borrowed a total of £186bn to keep the government and economy going. They prevented a recession after the dot.com crash of 2000 by doing so. In the ten years from April 2008 to March 2018 the government borrowed £990 billion – or more than five times as much. That almost certainly would not have happened without the crash. It’s a very crude measure but the difference – or about £800 billion is one way of estimating the cost of the crash. Roughly speaking that’s £25,000 a household.

No, that’s not the way to do it. Especially for someone who insists that QE will never be unwound and therefore doesn’t exist….

In the meantime public spending has been slashed.

That’s not actually true. I mean, the man can add up can’t he? Number of pounds being spent is higher or lower than then?

20 thoughts on “Oh dear, accountant cannot add”

  1. Is Spud on a ‘Borrowing is bad m’kay’ day today then? Normally borrowing is double plus good, because it pays for itself, so presumably a) the Tories borrowing more than Labour should be a Good Thing, and b) we should now be living in a Land of Milk and Honey thanks to all the extra economic growth caused by all that borrowing……..

  2. WTF?

    “In the years 1998 to March 2008 the Labour Government borrowed a total of £186bn”

    An average of 18.6bn each year? A likely story. Total receipts grew from about 300bn per year to 500+bn per year, so that 186 total is complete bollocks.

    An average of 186bn per year I can imagine, which gives a total of nearly 2 trillion over ten years, which seems much more like it.

  3. @DuckyMcDuckface: £186bn sounds about right. For the first Labour government they stuck to Tory spending plans and were running a surplus for a while. So by the time Gordon turned the spending taps on post 2001 there was a fair bit of spare borrowing capacity. They probably only hit net borrowing by 2003/3. And looking back the amounts they were borrowing seem like chicken feed, 5/10/15bnpa. The sort of sums the State loses down a sofa nowadays.

    https://tradingeconomics.com/united-kingdom/government-debt

  4. Bloke in North Dorset

    Jim’s correct about discounting the first 3 or even 4 years of Brown’s years. But that doesn’t tell the whole story and we probably need to look at dBorrowing/dt, or something similar.

  5. The government saved us from the dot-com boom? I didn’t notice.

    In other news, a poverty campaign job preservation group has announced the definition of ‘poverty’ must be changed to include people who currently aren’t poor. The main thrust is: poverty must include the extra costs people are burdeoned with by having children. Who’d’a’thunk? Having children makes you poor.

  6. So those of us who are poor but do not have children are somehow the same as those on several times our income who have a couple of kids?

  7. Has anyone had the temerity to ask Capt Potato why he thinks there was risk of a recession in 2000? FTSE 100 was down 10% and all share was down 8% which is all pretty much within the standard range of variability. It is also hard to see how that crash would have fed into a recession – it must have hit the US much harder than the UK. Y2K is a more obvious threat than that. Maybe the government helped us survive that as well

  8. I liked this comment in Murphy’s article
    “Ten years later that crisis has not really ended. Worse, many economists – me included – think a new crisis may be just around the corner.”

    Although he always claims to be the number one economics blogger in the UK, it’s rather different to claim to be an economist, ain’t it?

  9. Murphy identifies as an economist. That’s the same as actually being one and anyone who disagrees is a racist neo-liberal far-right hater.

  10. @Bongo

    Mr Spud is very clearly implying the Tories were in power in 2008 when the bank crash hit. Hence your mistake.

    He’s a c*nt.

  11. Bongo, yes, he’s cunningly picked the boom years to make Labour look good, and missed out the last few years where they doubled their borrowing in about 18 months.

    (not that the Tories are any better, pissing money away like a drunken sailor)

  12. Snippa doesn’t even know Ohms law, and his father was an electrical engineer, if you believe Capt Potato. He struggles to portray his own life accurately

  13. jgh ‘poverty’
    “Social Metrics Commission” financed by:-
    Legatum Institute: charity no. 1140719, financed by:-
    Legatum Foundation Limited, an arm of the:-
    Legatum Group in Dubai.
    The charity alone has seven staff on £80,000 – £210,000.
    Might be genuine, of course.

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