There are a raft of different methods of calculating government debt. It can be a little bewildering (even for an economics teacher!). I have tried to define the key terms in a simple format and also a more detailed and precise way. This only focuses on the UK. Defining Public Sector Debt Simple Way: Government …
How has the coalition government fared on its economic policies? Firstly, there are quite a few paradoxes. Ignore own promises. The first paradox of the coalition government is the best thing they did was to ignore their own advice. When they came to power, they promised spending cuts, austerity and a balanced budget within a …
A quick look at benefit spending in the UK. This is a follow up to Social security spending. Thanks to HM Treasury for help in finding useful data set. Source: Public Expenditure Statistical Analysis 2014 | Data Chapter 5 – 5.2 Social Protection spending Firstly, there has been a modification to the category of government …
Readers Question: Since the debt is mainly in the form of government bonds or gilts then it can only be paid back when the term of the bond terminates. What happens if there is not enough money to pay this back? Government bonds are a method for the government to borrow money. They sell bonds …
Readers Question: Do you believe the Coalition Government has used the right macroeconomic policies with regards to reducing the budget deficit? No. I’ve written a few times that I believe the coalition government made a big mistake in prioritising deficit reduction over economic recovery in 2010. The consequence of trying to reduce the budget deficit …
Readers Question: National debt is now extremely high. However aren’t there different kinds of debt e.g that which funds current spending, that which funds investment in infrastructure and emergency (bank bail out etc) Surely it’s the first we should really be worried about and less concerned with borrowing that makes the economy more efficient such …
Readers Question: In response to the post on ‘printing money, imports and inflation’, why can’t the British government just print lots of money and import goods from abroad to relieve the pressure on its budget? In theory, they could do that. But, if you print money and spend it on imports, you would see a …
Welfare spending in the UK is a controversial topic. There is significant political and public concern at the growth of welfare spending in the past few decades. In particular, there is a fear that the growth of the welfare state is encouraging a ‘dependency culture’. But, how much has welfare spending actually increased by? Are …