http://www.bbc.co.uk/news/business-35780703

Seems sensible initially at least. Better than the Tories pretending they're still on target with the national debt.

Hmmm- I am sure Gordon Brown also had "Fiscal Rules" and look what happened there

They tend to be so vague that they are all but worthless

Plus when did you ever hear a politician mention a rule they made up themselves after they've broken it?

Have I read that correctly? They're only committing not to borrow for day to day spending, but can borrow year after year after year for 'investment'.
In other words they aren't planning to balance the books at all? A bit like Gordon Brown saying he'd balance the books over an economic cycle, but he never stopped borrowing and when we got to the downturn post of the cycle we were screwed. If labour want to be taken seriously (and trash the NHS ruining Tories at the next election) they need to show they can balance the books. People will accept tax rises, but they won't accept never ending borrowing any more.

Depends I suppose. if they're borrowing for investment do they have to have a specific infrastructure project to put the money into first? (genuinely don't know what the suggested 'rules' are).


Define 'balance the books' in the situation where you can print money.


Or like George Osborne, who promised to eliminate the deficit by 2015. Sorry.. he meant 2020. The difference in the past is most chancellors haven't been dumb enough to announce targets at all, since the evidence suggests the economy does pretty much what the hell it likes anyway regardless of what they do. Brown and Osborne are both arrogant enough to believe they actually do run things, when in fact they're steering a boat down some rapids. They can affect it a bit, but it's pretty much always going where it's going.

When a chancellor can do is affect which bits of society are supported by the state and which aren't.


"People' in general have no idea how government finances actually even work. So we're going to go basically on a position of pandering to total ignorance. Joy!

You have to go really quite far off the right hand side of the spectrum to find an economist who doesn't think that it is prudent economic policy to borrow for infrastructure investment. It's usually assumed that for a developed economy the state should be spending about 3% of GDP on this. Alternatives such as ring fencing a source of income for a given purpose sounds sensible but never actually work out. Failure to borrow and invest results in busted roads and crumbling bridges which is a false economy. The UK presently invests way less than 3% (as do Germany and the USA) and this is predicted to cost us more than the interest on the bonds in the long run.

Brown didn't do a bad job, UK sovereign debt was never in the red zone. He should have covered a little more of his spending with tax receipts (instead of foolishly laying off vat inspectors), but overall he was about as good at his job as any modern chancellor has been.

Jon is right, chancellors have a lot of opportunities to tank the economy, but very little influence over short term growth. Their job is to fund schools today and let some future chancellor claim credit for the modest GDP bump that happens 20 years later.

On the other hand, if you have two projects needing 10,000 and you have 10,000 in the hand and give out 20,000, it is irrelevant whether you say the borrowed 10,000 is going to be used for a or b, at the end of the day you have borrowed 10,000...

At the moment we are struggling here, because all regional and local councils were told 2 years ago that they had to get back in the black within something like 5 years. That means some services are being cut and some investments are being deferred.

except for the illegals ...

and ps.
there is no such thing as 'fiscal credibility' ...