UK debt argument

[SimonF]

I would appreciate feedback on this.. http://www.huffingtonpost.co.uk/mobileweb/ramesh-patel/growth-cameron-austerity_b_2007552.html

[Rick Horton]

 

I would appreciate feedback on this.. http://www.huffingtonpost.co.uk/mobileweb/ramesh-patel/growth-cameron-austerity_b_2007552.html

 

I read the article, but I was confused. I detect that the author doesn't understand money and debt, but I'm not sure since I don't really have a great grasp on things like that. Sorry. I tried.

[Andrew79]

Damn, lost my first reply, so this is going to be quite a bit shorter:

His first argument, UK government debt wasn't the highest in the world when our glorious leaders claimed it was. *Shrug* politicians are liars, it's what they do. But regardless of the exact amount, it's still obscene. And he's not really making an argument here, just stating a claim.

His second argument, the deficit was not caused by our previous masters' overspending is false by definition. You only run a deficit if you spend more than you earn (yeah, I know, none of it's earned). There's nothing complicated about it. His claim that "It's basic economics: when output falls the deficit increases" is only valid if you completely ignore spending. I'm incredibly suspicious of someone who says he's "an advocate of free market economics" putting rubbish like this forward.

He backs up his first two arguments by claiming things were worse before the 2008 crash, but even if you take this at face value, it's got absolutely nothing to do with his arguments.

His final argument, that the cost of borrowing is low because saving is high has been shown to be a lie by the recent downgrade because the government wasn't cutting spending fast enough.

The article gets a more in-depth kicking here: http://brackenworld.blogspot.co.uk/2012/10/did-ramesh-patel-get-paid-for-this.html