Quote:
Originally Posted by Chris
Inflation also skews the real-terms value of the debt - i didn't see you hurrying to make appropriate caveats to your bald figure of £2tn.
|
No it doesn’t, which is why I said real terms to create a distinction between inflation adjusted (
real terms) and not inflation adjusted (
nominal terms).
Quote:
|
Besides, the impact of GDP is a perfectly right and proper consideration. The debt is only a problem if it can't be serviced. GDP indicates how serviceable the debt is, which is why it is relevant, and why the PA chose to express the national debt in those terms in that graph.
|
GDP doesn’t indicate how serviceable the debt is at all. It’s only an indication if the Government enjoys it’s share of the wealth through taxation. With debt at £2 trillion I’m contending that for the last 40 years it hasn’t.
Quote:
Further ... loose monetary policy was a far greater contributor to the supposed 'massaging' of public sector net debt in the second half of the 1980s than selling off state monopolies, though I grant you, getting unprofitable heavy industries like coal and steel off the balance sheet did it no harm. Ultimately we can't tell where monetary policy might have ended up because the ERM debacle intervened.
And on that point, I note that many of the same people who said we should be in the ERM, also said we should be in the Euro, and continue to say we should be in the EU. But I digress.
|
I’m sure Governments of both colours have used plenty of tricks to massage the figures over the years. I’m not here to defend them.