This is another graph based on budget data from a period of more than a decade, all sourced from HM Treasury. It shows current government income compared to current government spending from 1997 to 2016 (the last being forecast data, of course). Current spending excludes investment spending but that then leaves this looking akin to a more commonly understood commercial sector view of 'breaking even':
Despite all the spin against them, Labour had spending well under control throughout this period. It managed its budgets.
Then the bankers trashed the economy. The impact is very obvious.
Now the Tories say they'll rebalance the books, except as I've shown, there is no chance that they will do that.
In that case we still face the certainty of deficits for time to come. Ed Balls has realised that.
What he and we now need to say is what we do about that when it is very obvious that the private sector cannot ever get us out of this mess. I suggest starting from here, and here and, of course, The Courageous State.
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So government current spending grew from £300 bn to £600 bn in 10 years. That is a compound growth rate of over 7% and I suspect that understates the actual increase in spending attributable to public sector pension liabilities, PFI commitments and tax credits reported as negative taxation. It was obvious that that rate of growth of spending could not be continued indefinitely i a mature economy that could not expect to grow at much more than 3% in a good year.
As it was most of the early surpluses were achieved by maintaining Conservative spending plans, bringing forward corporation tax payment dates and a massive sale of broadcasting rights that we now pay for through our telephone bills. In later years there were dozens of “stealth” tax increases until the government ran out of ideas and companies stopped investing in the UK.
But you ignore the fact – the spending went up because we have more people, more educational needs, more old people, more health care demand.
People want these services and are willing to pay for them. Why deny them to them in the only cost effective way they can be paid for?
Ot would you rather deny healtth care, security inb old age and education to all?
“But you ignore the fact — the spending went up because we have more people, more educational needs, more old people, more health care demand.”
You ignore the fact that those in education, the retired and the ill pay little tax. The rest of the economy that was paying for the extra cost saw government spending going up by more than 7% a year for 10 years while the rest of the economy grew at a much lower rate.
After 10 years it is not surprising that the tax revenues couldn’t keep up with spending. If the government doubled the highest rate of income tax it still wouldn’t raise enough revenue to eliminate the deficit.
Respectfully, since this utterly ignores facts I can’t be bothered to reply
What you are saying is just wrong – but I do not have time to waste repeating stuff for your benefit