I never cease to be amazed at the appalling coverage of basic economics by the national press but today’s shock exclusive from the Daily Mail really plumbs new depths. The headline reads: Government borrowing falls by £3.6billion as the recovery powers on. The sub heads read: Deficit cut from £14.2billion to £13.3billion in the space of a year and Borrowing falls from £50.4billion to £46.8billion. It concludes from this that George Osborne’s austerity policies are working.
Ok. Back in the real world. The statistic the Mail uses is that in the six months to August Government Borrowing was a mere £46.8 billion, down £3.6 billion from the prior six months. But that is not is not TOTAL borrowing just ADDITIONAL borrowing. Total borrowi9ngs are still increasing at almost £100 billion a year. The budget deficit in August was marginally down on a year ago but was still a disgraceful £13.3 billion.
So the correct headline should be: Government borrowing still increasing rapidly. The sub heads should read “Monthly deficit trimmed marginally but still a disgrace & higher than when labour left office” and “borrowing increases by £46.8 billion in past six months.”
The fact is that by 2014 the UK’s debt/GDP ratio will be 90% (if one, very charitably, ignores a stack of off balance sheet debts like PFI contracts and student loans that will default). At 90% economic growth gets c hoked off by debt, you enter a one way spiral of decline.
Osborne claims the ratios will improve from 2014 but he has missed every target to date. If borrowings are increasing by just under £4 billion a month now ( as opposed to just over £4 billion a year ago) I somehow suspect they will still be increasing pretty sharply come 2015.
Britain is still going bankrupt. The Daily Mail may spin for Osborne or might just be written by total morons but the facts, rather than its headlines, speak for themselves.