Not goady, I ACTUALLY just want to understand!!

[HackAttack]

Right the big anti Labour argument I'm hearing is that Conservatives are better for the economy but national debt/borrowing has hugely increased under Tories while services are cut to bugger all.

I work in a service where I can see how much has been lost and yet the deficit is bigger??

I'm the first to admit I am not an economist so this isn't goady, I've asked on a few threads and no one will answer :(

You won't get an answer - just the constant 'Labour is great, Tories are shit' rhetoric

If you genuinely want to know about economics, then Google is a good start.

But people here won't state facts, just opinions

exactly what LiviaDrusillaAugusta said.

Economics isn't a science. It's a series of opinions and assertions and any economic policy will have some economists arguing for it and some against. My DH and his father both have Masters in economics, his dab believes in austerity, DH believes we should stimulate the economy through huge public infrastructure projects.

Tories would say they inherited a bad situation and the increase in debt is a hangover from Brown's days. Labour would say otherwise.

Economics depends on so many factors and has the joy of the human factor as well. People can use models of past behaviour but past behaviour does not predict the future.

Also the rate of increase in national debt has actually decreased under the Tories, even though it's bigger in absolute terms.

I have googled, and listened to all of the politicians and not one has explained what the extra millions have gone on if its not public services. No clearer from this, I give up

Staying neutral here, the issue is the difference between the deficit and the national debt, and interest on the national debt. The Tories have cut the annual deficit by use of austerity (ignoring arguments about whether that was sensible and whether they could have done it better or smarter), but the annual accounts are still in the red so the debt is still growing and will do so until the economy gets back in the black.

In household terms, say I have an income of 1,000 quid a month, a debt of 5,000, and combined outgoings and debt interest repayment of 1,200 quid a month then my debt is growing at 20 quid a week. If I start meal planning and shopping at Lidl and don't donate to charity and put tarpaulin on the hole in the roof instead of getting it fixed properly then I can cut my outgoings to 1,050 a month, but that's still a deficit, and my debt will still be growing every month, albeit slower.

The increase, approximately one trillion pounds, is far too big to blame on a previous government.

The deficit and national debt are different things. The deficit has decreased, the national debt has spiralled.

This website explains the relevance of the two. As far as I know it is impartial!

www.economicshelp.org/blog/334/uk-economy/uk-national-debt/

Oops sorry, switched my example half way through. My deficit gets cut from 200 quid a month to 50 quid a month.

Oops sorry, switched my example half way through. My deficit gets cut from 200 quid a month to 50 quid a month.

This graph is a bit old but the tories have continued to decrease the deficit. Not easy when you are paying all the interest on the extra debt that labour borrowed.

However! Not exactly labours fault that the recession happened. That said, labours manifesto outlines more borrowing and a lot more spending. So you can garuntee to increase the deficit under labour because they have promised to do so. The tories want to continue to slowly chip away at it.

Thank you Cormorant

FullFact is a good website - they investigate parties' claims and check them against the facts.

The economics of all this is complicated and the truth is that economists disagree about how to deal with recessions - some say you should borrow and spend on jobs and infrastructure to boost the economy; others say you should rein in spending and create austerity.

Political parties tend to latch on to whichever economical theory suits them - if you are rich you are happy to grow richer on the poverty of others by advocating austerity because it does not impinge on you; if you are poorer you prefer the spend your way out because it might give you a job and a home.

No-one is "right" in objective terms; they just come from different moral standpoints.

Government spends a lot.

If there is investment in certain areas, that could increase jobs and reduce social issues - where a lot of money that Government spends is going. So investing in education, health, social care and infrastructure. But that's going to cost money at the start but might reduce spending later on.

OTOH - Governments could reduce spending and look at the tax system to encourage spending and raising revenue that way. Or look at ways of attracting business to create jobs.

Lots of models. Lots of theories.

So basically it's all a discussion about how we address the deficit rather that one being at fault, etc

Thank you for actually giving some answers

Austerity shrinks economies. Read Mark Blyth's book. That's why there is more debt. We need to invest. Another view that supports that is Steve Hilton, former advisor to David Cameron. He has some interesting ideas even if he is a bit of a knob (particularly about the Eu). The problem is the Tories use the analogy that the economy is like a household budget. It really isn't but people understand that and run with it even though it is killing our economy. Google our growth if you want evidence.

Sticking with cormorants example, she could borrow money to invest in education to get a better job that pays more so her income increases.

But she has had to make that investment which is expensive and needs paying for and there might not be the job that pays more.

Good thread.

I'm watching and reading with interest.

Reading that website, it's very interesting

I like to think I'm reasonably well informed and at least functioning well enough professionally but the economy I struggle to grasp

Well yes it's different from household economics in that it's not a zero sum game, but that's the easiest way to explain the difference between deficit and debt unfortunately, and that's what the OP needed explaining. I tried to think of an acceleration/speed -based analogy but struggled (I've now worked out how to do it, but actually that's even worse in terms of the implicit message).

Have a look at some of the "more or less" podcasts on R4 - they're good for statistics too.

The deficit has been cut by 2/3rds however the debt has increased - this is primarily due to the interest of millions of pounds per week on that debt. The tories want to keep spending under control and work towards paying down the debt however Labour want to increase spending and have announced borrowing of 250 billion for infrastructure i.e. 'Borrowing to invest' and thus push back paying off any debt to younger generations. The idea of not borrowing huge amounts more whilst you are drowning in debt is why the tories are seen as more competent to run the economy

You're getting confused between debt and deficit. We need to reduce the deficit (which the tories have) before we can start on the debt.

The figures