{"id":268,"date":"2002-11-28T00:46:27","date_gmt":"2002-11-28T00:46:27","guid":{"rendered":"tag:owlfish.com,2004:colinweblog.20021128004627"},"modified":"2003-06-30T23:20:59","modified_gmt":"2003-06-30T23:20:59","slug":"28112002","status":"publish","type":"post","link":"https:\/\/www.owlfish.com\/weblog\/2002\/11\/28112002\/","title":{"rendered":"Budget deficits"},"content":{"rendered":"<p>The big headline in the UK today was that the government has admitted that the current spending plans will result in a budget deficit of GBP20 billion.  The BBC news didn&#8217;t mention anywhere what this was as a proportion of GDP, which is useful when comparing with the state of our continental neighbours.  It seems to provide this information <a href=\"http:\/\/news.bbc.co.uk\/1\/shared\/spl\/hi\/uk\/02\/pre_budget\/graphs_popup\/html\/surplus.stm\">here<\/a> but looking at the graph shown you would expect the deficit to be around 0.5%.  If you read the description of the graph though you will see that this is excluding &#8220;borrowing for investment&#8221;.  Now it&#8217;s always difficult to determine what can be classified as investment, versus on-going expenses, so this number should be viewed with suspicion from the start.<\/p>\n<p>In addition it&#8217;s also not a useful number in the long run &#8211; you might have borrowed money for investment, but at the end of the day you still have to pay it back regardless of how it was accounted for on a year by year basis.  I agree with the government approach of having a balanced budget only over the sum of an economic cycle (although that&#8217;s a very hard thing to achieve &#8211; it means you must make some sort of prediction as to the likely length of future growth periods or recessions!), but excluding borrowing for investment seems like a misleading thing to do.<\/p>\n<p>I did manage to work out what the deficit is as a percentage of GDP &#8211; by looking at the latest figures from the latest <a href=\"http:\/\/www.statistics.gov.uk\/pdfdir\/oie0802.pdf\">figures<\/a> from National Statistics.  Here you can find that the GDP for 2001 was 988 billion (plus change), which leaves the deficit at around 2%.  <\/p>\n","protected":false},"excerpt":{"rendered":"<p>The big headline in the UK today was that the government has admitted that the current spending plans will result in a budget deficit of GBP20 billion. The BBC news didn&#8217;t mention anywhere what this was as a proportion of GDP, which is useful when comparing with the state of our continental neighbours. It seems [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.owlfish.com\/weblog\/wp-json\/wp\/v2\/posts\/268"}],"collection":[{"href":"https:\/\/www.owlfish.com\/weblog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.owlfish.com\/weblog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.owlfish.com\/weblog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.owlfish.com\/weblog\/wp-json\/wp\/v2\/comments?post=268"}],"version-history":[{"count":0,"href":"https:\/\/www.owlfish.com\/weblog\/wp-json\/wp\/v2\/posts\/268\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.owlfish.com\/weblog\/wp-json\/wp\/v2\/media?parent=268"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.owlfish.com\/weblog\/wp-json\/wp\/v2\/categories?post=268"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.owlfish.com\/weblog\/wp-json\/wp\/v2\/tags?post=268"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}