Budget deficit limits give-aways

Gordon Brown sang the praises of Labour's management of the economy while announcing a modest boost in spending for pensioners and motorists.

He said the UK was the most stable of all the major economies, and maintained his forecast for economic growth of 3-3.5% in 2005 and 2.5-3% in 2006.

news.bbc.co.uk...

Well, it seems that our economy is doing very well at the moment, apparently we have the most stable of all major economies in the world.

Tory leader Michael Howard said that the government was planning an additional £168bn in borrowing over the next five years, and that the only question was which taxes would have to rise - the equivalent of 3p in the pound.

Although the person argueing isn't the best souce to quote, if there is truth in it I'm a little worried, the loan more spend more is dangerous, what happens if the economy dips and we need to maintain the spending or services will be in danger but we will also have the debt to pay off.

This is one of those cases where the bald figure needs to be backed up by the % (of GDP) figure.

Despite the number figure for the UK's borrowing being the highest ever as a % of GDP it is actually historically moderate (and compared to our international competitors/partners it's actually quite low).

(this is how come using the % of GDP we can see that the figure of their peak borrowing in todays money would be approx £90 billions)

[edit on 17-3-2005 by sminkeypinkey]