to ask why reducing the deficit is such a focus?

[workadurka]

I understand that we have to pay significant interest on the deficit thus paying it off would free up more budget for public spending - but why is it such a focus now?

We've had a deficit for decades and decades. But as far as I remember no-one really mentioned it as a problem until the last election.

And despite (some would say because of) austerity, the deficit grows and grows.

Can't help thinking it has been blown out of all proportion by this govt to justify their agenda of welfare cuts and short termist selling off of UK public assets.

I get really frustrated when all the debates are about deficit/EU/Immigrants and overshadow more urgent issues like getting children out of poverty.

And like housing...or lack of it...and the slow clearance of social housing.

Absolutely.

Maybe because the holders of the debt may call it in? So its like having a huge cc debt, fine as long as you can service it but if thr bank says pay it back in 5 days time you're screwed. Maybe!

Have you read thisismoney's The End of Britain? Scary stuff, but I guess they are trying to stop the whole economy going imploding.

Sorry....it's money week, I think, doh.

Because the debt has to be repaid and the sooner the better?

If the economy continues to get better as it has been doing, parents can do more for their children. Chiod poverty is not true poverty in the UK as we have a welfare system that provides well for children. Some will always have less than others due to the choices they make, it's not the governments fault. Nobody is forced to have children.

perhaps if we stopped blowing up peoples countries for there own good then paying to put it right again?

we still owe from ww2 dont we?

actually i never understood that they attacked us we won we sent them food etc and impoverished ourselves in the process

i seriously would have made them owe us money for that i mean we paid america for their spam and food so why didn't they owe us?

we are too generous to other countries

Politicians are opportunists (even left wing ones) Domestic public spending has just had five years of being hammered and being labelled evil, irresponsible and incompetent. So, Ed Balls agrees that even he won't do any of it! Rescuing poor children costs public money. That's why poor children, and all other social needs, are being ignored. The Tories have done a brilliant job of persuading the country that everyone who needs social help is scum. That's the world we live in.

actually littlemonsters im doing the freedom course with someone who was forced to have a child literally

Because it is better for future generations

No I've not read that. Thanks for the tip off.

Pretty clear that this govt isn't getting anywhere near to reducing deficit though? And not convinced any other parties will either? So even if it needs to happen, it's not going to...

The other issue I have is people looking at the deficit/national debt in isolation. If we were borrowing money to invest in the UK, brilliant. But this govt has borrowed more, and invested less!

Perhaps the deficit has grown more slowly than it would have under another govt as supporters of this one are wont to tell me. But we have still borrowed shitloads and what have we got to show for it?

Problem with deficit spending is that it adds to the National debt.
Because we have such high debt, we're paying oodles of taxpayer money on interest (much more % of our GDP than we used to).
That means less money to pay for things like Sure Start Centres, cancer treatment & new roads (unless we want to raise taxes, nobody likes taxes).

Then the debate goes off on tangents, about whether we're spending money on stupid things (like EU membership or Trident or HIV treatment for resident foreigners so that they don't give HIV to everyone else). The idea is that you cut spending on the right 'stupid thing' so we can pay off more of the debt and keep running a higher deficit. The point of parties is how they identify what the stupid thing is (and who isn't paying their fair share of taxes or is wasting taxpayer money in other ways).

All flavour governments seem to have deficit budgets (plan to spend more than they raise in taxes). The question is how much deficit is too risky or when is the benefit worth the risks.

Historically inflation was higher so the debt reduced itself quickly, but now we have almost zero inflation and the debt keeps eating up the money I paid in taxes.

Not a complete explanation, but partial start.

chicken from what I understand the borrowing started with the Napoleonic wars.

It was mainly the US/Marshall Plan that rebuilt West Germany. Britain sent food and reintroduced rationing, yes. But, mainly to support the principle of cooperation, than to pay for the restructuring of an economy. The US did the same rebuilding on the Japanese economy. US economists would point to the fact that we're not fighting WWIII as proof that it worked.

Thanks ragged so effectively as the economy can no longer grow at the unsustainable(?) speed it was, inflation is low and that's adding to the issue in a big way...?

well i suppose if we spend all our money paying to repair what we blew up it makes sense not to blow up anything else!

bit like taking a kids pocket money away

It's entirely ideological

It's a brilliant excuse to privatise the NHS, and everything else, and get some large-scale poor-blaming going on

And ironically, austerity hasn't improved the economy, and has probably been detrimental. It would have recovered anyway, the question is rather how much the current govt's measures have slowed the process.

All the benefit changes have cost billions. This mendacious bunch have increased the deficit. This is all smoke and mirrors to justify their right wing ideologies.

Effectively most govts cut it very fine with their expected income/spending ratios & Labour govt spectacularly guessed wrong just as the global economy tanked taking everybody else down, too.

On top of that we keep getting involved in foreign armed conflicts which are astoundingly expensive.

Obama administration was interesting: they basically said "Fuck it, what's another X-trillion of debt?" and spent a lot of money on social and infrastructure projects which have by and large been very popular. But American economy is huge, not sure Britain could take that kind of risk and turn out ok.

Deficit and debt are different. I don't believe we need to rush to pay down the national debt. I do believe that we should not be increasing it. Deficit is the amount by which we are increasing the debt.
The deficit has reduced under the current government, which is a good thing in my mind. However the government are still spending more money than they have - creating more debt.
In an ideal world, governments will make money (operate at a surplus) when the economy is growing, and only operate at a deficit when the economy is falling. We appear to be operating at a deficit despite the economy improving, building debt that needs to be paid off in the future. What makes it scarier is that we are expecting pensions and healthcare to cost far more in the future, which means it will be harder to deal with our debt then - not easier.

Have a look at this
en.wikipedia.org/wiki/United_Kingdom_national_debt#/media/File:UK_GDP.png

National debt is borrowing from our children and grandchildren

Pre Gordon Brown it had nearly been brought under control but he and Ed Balls were wazzocks who thought that a bubble was real growth.

Austerity is too harsh - it needs to ease back
but kicking the can down the road will just bugger everything for our children and grandchildren.

In the past the UK could rely on undeveloped countries to produce worldwide growth. Now there are none.

@ "wazzocks" Talkin

I think that the phrase 'kicking the can down the road' is the summary of what has happened since the credit crunch 2008. Sooner or later, there'll be nowhere further to kick it.

Ratfink, the deficit has decreased; debt has increased. You are being misleading to imply otherwise.

[http://static.guim.co.uk/sys-images/Guardian/Pix/pictures/2013/3/20/1363802502484/Deficits-by-chancellor-001.jpg]

[http://www.economicshelp.org/blog/334/uk-economy/uk-national-debt/]

It is a focus now because the government have got their head out of the sand, looked around and realised that even by raising the retirement age there is such a structural deficit (caused by spending commitments which can't be met by tax revenues) coming our way caused by the ageing population that if we don't do something about it, the problem will not go away.

This problem has been forseen for decades, but even during the boom years government put their head in the sand and said - lets enjoy the boom and hope the deficit problem goes away. Co-incidentally their doubling of money spent on healthcare in the "noughties" massively increased the national debt and lengthened life expectancy

(can't do right for doing wrong)