Here’s something I think you really need to know if you want a Green New Deal, or an NHS, or an end to needless suffering.
The national debt is just a big old number. Really. That’s what it is. It’s not an impediment to change.
Why am I pointing this out? Because the way the national debt is being talked about at the moment is really helping to further the austerity agenda, so I thought it’d be good idea if we all understood what government debt is.
Please don’t scroll away, I think you’ll find this useful.
So here it is. When the UK government spends more than it taxes, the pounds left over are in the pockets of the private sector (that’s you and me).
This government-spending-more-than-it-collects thing is known as the government running a deficit, which sounds bad or even immoral, but the government’s deficit is the private sector’s surplus. It’s the exact same thing. The private sector is you and me. That’s our money.
All the deficits ran since the dawn of time by the UK government add up to a certain number of pounds, and that number of pounds is known as the UK national debt. These pounds are ultra-safe pound-denominated financial assets held by people and institutions in the private sector. Nothing to worry about.
Put another way: the national debt is nothing more than the pounds spent into existence by the government that have not yet been used to pay taxes.
So. Aiming to run a government surplus (meaning the private sector has to go into deficit) or trying “wipe out” the national debt are both bloody silly things to do. Again, that’s our (the private sector’s) wealth being erased.
Whatever the national debt figure is, whatever the UK government deficit figure is – these numbers are just numbers on a spreadsheet and are meaningless with no other contextualising information.
I’d really love to see the political discussion move on from: “you guys ran up the national debt!” “No, you guys did!” and both sides vowing to reduce the deficit.
When politicians talk about cutting the deficit, they always mean cut it from the same place – they cut the spending that helps those who are least able to help themselves.
Especially if you’re on the left, you should know that pushing for deficit reduction amounts to pushing for austerity.
There’s a link below if you want to know more.