“Would we have the biggest budget deficit in living memory?” It’s a fair

Comment on Why I’ll Never Vote Conservative at a General Election by David.

“Would we have the biggest budget deficit in living memory?”

It’s a fair question and I agree we do have the biggest budget deficit ever in billions terms, but not as a % of our GDP. How would the Conservatives have prevented us going into debt while protecting the economy from free fall and a possible depression? All major economies have had to increase their level of debt because of the recession, so we are not unique in having more debt.

Also the actual amount of debt (the billion figure) is not as relevant as the debt as a % of GDP which is a measure of affordability or ability to pay it back.

An analogy would be considering two families, one with a low wage (£20K a year) and the other a good wage (£50K a year). Which can better afford a £20K debt? It’s the relative amount that matters not the exact amount and we are not in any difficulty in dealing with our current debt levels (it’s been much higher in the past).

Take Greece who are in real trouble right now, their debt is over 100% of their GDP, it was 108.10% of GDP in 2009 which makes it difficult for them to pay it back, hence all the news about Greece being in real financial trouble.

On the other hand Germany a very strong economy has their debt at 77.20% of GDP in 2009 and it’s coping with it.

Our debt is 68.50% of GDP which is lower than Germany and many other economies and for us under the circumstances (credit crunch/recession) it’s not a high debt (could have been a lot worse).

You can find the debt figures I’ve used at https://en.wikipedia.org/wiki/List_of_countries_by_public_debt

If you check the Conservative manifesto they refer to Japan as a good example, yet Japan have a debt of 192.10% of GDP, so not an economy we should want to emulate when it comes to national debt!!!

What level of debt would you think we’d be at now if the Tories was in power when the recession hit? Remember we had a national debt of around 50% under the last Conservative government, so it’s not a case of the Tories had us in the black and economically stupid Labour took us into the red, the Tories had us in the red for their entire term in government.

And based on the economic stimulus package put forward by Labour (apposed by the Conservatives) is working, do you think we’d be better off as a country being in less debt, but still being in recession with mass unemployment with falling tax receipts and a higher welfare bill?

There’s a strong argument doing what the Tories wanted to do (let the recession take it’s course) would have resulted in a higher level of national debt long term since more people would have been unemployed which means lower tax receipts and more to pay on benefits.

David