Tory Minister Sajid Javed plucks some numbers out of his arse

August 6, 2014

People have to stop thinking of Government debt as being like a household debt. It works very differently from a private debt, indeed many aspects of it are the complete reverse. A low public sector debt is not necessarily healthier than a higher one, and in practise, economies with a higher debt tend to be in a healthier shape than those with a lower one.
Furthermore, an economy that is in surplus and not in deficit will usually hit a slump within a couple of years. This is because a surplus is usually a sign that markets are not selling goods to the fullest capacity, which leads to profit losses and potentially the laying-off of staff in growing numbers.


From the Telegraph:

Labour’s “basic instinct” is to spend money and their economic policies will leave Britain £500 billion worse off, a Cabinet minister will say today.


Sajid Javid, the Culture Secretary, will say that labour MPs believe that spending money is a “mark of success” and they are “simply not comfortable” with austerity measures.


He said that according to a Treasury analysis, under Labour the Britain’s debt will be the equivalent of two thirds of national income in 2035. Under the Conservative approach, it will be a third of GDP.

There’s a lot wrong with this idea. Apart the fact that Labour haven’t produced any spending plans yet, and when they do they’re unlikely to be much different from the Tories, where does he get £500m from? And what does ‘worse off’ mean in this context.

His time scale is over the next 20 years. ‘Worse off’…

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