Wednesday, 9 May 2012

Nick help me out...

I spend a lot of time defending Nick Clegg and our role in the coalition.  I still think we are doing the right thing and I still have the utmost respect for him, however statements like this don't help:  

"I actually think we have a moral duty to the next generation to wipe the slate clean for them. We have set out a plan - it lasts about six or seven years - to wipe the slate clean to rid people of that deadweight of debt that has built up over time."

The problem is of course, that the above statement confuses debt with the deficit.  Even then it confuses the deficit with the structural deficit.  It is fine to say that he thinks we have a moral duty to wipe the slate clean for the next generation, however we are unable to do that.  Even at the end of this plan (which rolls over into the next parliament so there is no guarantee that it will be seen through - or if it is that it even works) the country will still have over £1 TRILLION debt.  The coalitions plan is not to reduce this, not even by one penny.  In fact it will be ADDING to this.

The plan set out by this government is to remove the Structural Deficit from the government's budget.  This is any additional money that the government has to borrow in order to meet it's spending commitments when the economy is acting at it's potential - i.e. once short term factors have been removed.  They still expect that because of low growth there will be a Cyclical Deficit, so borrowing will be needed - but this is something that should be removed within normal economic cycles.

Like I said, I still support the coalition, I may feel that they make some incorrect decisions (but at least they are not just trying to create a buzz and are coming up with solutions).  Statements like this, which are factually incorrect - may make it sound better, but are factually incorrect and don't highlight the seriousness of the issue to the voting public.

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