Echognomics : Debt, Deficit and Deceit

As if having problems with his continental cousins, Dishface Dave is also having problems with his sums. Now public finances are at the best of time a very dry and taxing subject for all concerned, some more than others.

Now before you all go to sleep, this isn’t going to be some lengthy magnus opus like An Inquiry into the Nature and Causes of the Wealth of Nations. You don’t even need, like I have, an O Grade in Arithmetic and an understanding of log tables; yes it’s more simple than that.

The main concern with the public is the state of the economy and relating to that jobs and public services. You would like to think that the Prime Minster would be honest and say how difficult things and that we’re making progress. He does say both but the latter isn’t quite true.

All politicians lie, it’s in their nature. Just look at what any party has done and compare it to their Election Manifesto. Once you’ve put your ‘X’ in their box and they get elected that’s mostly it for the next 5 years or so until they want your ‘X’ again…please pretty please. This lie by Dishface is a biggie really.

Dave’s latest PR video proports to show that things are not as bad as they seem.

Courtesy of ‘Webcameron’ and YouTube you can see the video here:-

Did you spot the deliberate mistake ? No ? Tsk Tsk.

The first 40 seconds covers DEFICIT and we’re told

along now to 2 minutes 10 s when Dave reappears.

He now says

So though this government’s had to make difficult decisions we are making progress. We’re paying down Britian’s debts…

A lot will probably say Debt, Defecit pfft…they’re the same innit ?

Well…no

According to the OED, debt and deficit are defined as:-

 

In terms of public finances, what this means is:-

Debt – The TOTAL amount owed
Deficit – The amount by which spending exceed revenue i.e. what the difference was over a fixed period, typically a year

So is the video correct ?

Data is Crown Copyright sourced from the ONS here.

Looking at the data for net monthly borrowing, Dave is correct. Net borrowing has gone down

2010 £149,103m
2011 £121,019m
2012 £101,197m

So far so good, but according the the latest forecast by the OBR, borrowing will continue for the foreseeable future (2012-2018).

And what about debts ?

Data is Crown Copyright sourced from the ONS here.

Well, no. We’re still borrowing (£15,232m in December 2012) so obviously our overall total debt must increase (there ain’t a load of green on the borrowing chart); we’re currently at $1,111,380m which equates to £42,098 for each of the 26.4 m householdes in the UK. The ONS and OBR predicts that the UK’s debt will rise to over £1,500,000m by 2018.

Some may say that if we all lived by the Micawber Principle

Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

we may not all have the shiny baubles and black mirrors we all desire but at least we won’t be boke; however we’re not like that. You don’t need to be Noriaki Kano to understand that we will always place ever increasing demands on all our public services however as yet we haven’t found that ‘someone else’ to pay for it all.

The E Word

And finally, the long trailed, slightly delayed, Europe speech finally gets delivered and we discover that us lucky Brits *will get a vote on staying in Europe.

*I say ‘will’ however there are some quite substantive caveats

For the uninitiated, in the event of a ‘No’ it is not as if Britain would then cut her mooring ropes to the western edge of Eurasia and, using Her Majesty’s Navy sail off to sunnier climes. No, were it that simple, especially as we seem unable cope with a few cm of crystalline precipitation.

The ‘Europe’ here is the economic and political union of 27 member states (the European Union), as opposed to EFTA, EEA, Eurozone, or Europe, the council of. Here’s a simple explanation:-

Image from http://en.wikipedia.org/wiki/File:Supranational_European_Bodies.png

Of course it’s not just UK politicians that are getting exercised. Our former colonialists in North America also intervened with their opinions; which doesn’t do anything to counter Britain’s critics that she is America’s poodle in Brussels.

There are a lot of inevitably technical and detailed issues that have to be sorted out for every member of the European Union as it moves forward, but as a broad and general theme, we value a strong UK voice in a strong European Union.

…We have a growing relationship with the European Union as an institution which has a growing voice in the world – and we want to see a strong British voice in that European Union. That is in the American interest

Philip Gordon, the US assistant secretary responsible for European affairs

So what did Dishface actually say ?

In summary, this:-

The whole text is here if you’re suffering insomnia.

What was the reaction ?

Well, what did you expect…

The Europeans

We need Britain at the heart/in the fast lane/pick-your-own-analogy of Europe. Not that we value their opinion you understand, but for their net contribution to the coffers and their influence with the USA.

The Chinese

We have enough problems with America on its own without your help.

The Labour Party

Er…all we’re saying is that we don’t want a referendum now.

The Lib Dems

This isn’t just any European In/Out, it certainly isn’t a Lib-Dem EU In/Out vote, we tried that already. No, this is a baby-eating Tory EU In/Out hokey cokey policy. Chutzpah ? Pfft!

UKIP

This was our idea in the first place, we’ve been banging on about this for years. Secondly you’ve no chance in getting any powers handed back so just give up now and save us the wait until 2017.

Tony Blair

I tell you, I couldn’t be the official Envoy of the Quartet on the Middle East without being nice to my European colleagues and it’s been very lucrative work promoting democracy.  My chums the Kinnocks had a really good time and so did Peter [Mandelson]. We must look after future labour leaders. I’m still after the top [EU] job you know.

So what will happen come the referendum in 2017 ?

Well what Dave is after first is a renegotiation of powers as members of his party don’t like the ever-closer union among the peoples of Europe bit of the EU, first initiated, as we all know, with The Treaty of Rome.

Assuming that he get’s something, it’s likely that if he feels it’s enough two things will happen:-

• He’ll lead the ‘Yes’ campaign, alienating some of his backbenchers who feel that either they will lose the vote or that he didn’t get enough powers repatriated or both
• He’ll quietly or otherwise abandon the policy; he has form you know.

Either way the endpoint of his leadership has been set. Bojo are you reading this ?

It’s very unlikely that we’ll even get to a vote, assuming we can survive the next 4 years of meaningless debate, because as soon as Dave asks for something, the others will want to know what their quid pro quo is. All we’ll get is more infighting and grandstanding but on a European scale.

Additionally, the vote is contingent on Dave being PM in 2017 which, given the state of his party, the coalition and the electorate, isn’t a racing certainty at all.

Another question is who will lead the ‘No’ team. It doesn’t really matter as ‘The Establishment’ of the majority of Westminster MPs aided by the state broadcaster will just conspire to characterise them as a bunch of swivel-eyed loony little-Englanders only marginally removed from the Neanderthals in the BNP or EDL. It’ll be like 1975 all over again.

Image at top of post taken from http://e-cynical.blogspot.de/2013/01/should-i-stay-or-should-i-go.html

HMV RIP

The news this morning is that HMV is now in administration with the potential loss of ~4,500 jobs . It joins other recently departed ‘high-street’ retailers, most recently Jessops, and has generated the usual meaningless comments from MPs and ‘celebs’.

HMV is a national institution that has been a feature of our high streets for over 90 years so this news is deeply worrying. For the sake of HMV’s employees, we hope a way can be found to keep the business going. The demise of HMV – a national institution – would be a sad loss for British retail.

Chuka Umunna MP, Labour’s shadow business secretary

Putting aside the meaningless comment that it’s a national institution (really Chukka ?), my surprise that’s its managed to last so long given what’s happened. Rising rents, business rates, vat and management inaction have all contributed to where we are now. In the eyes of many, music to listen to, as opposed to experiencing the performance, has now become a digital commodity. Hastened by the launch of iTunes and other electronic downloads, *cough* BitTorrent *cough*, consumers now prefer this as their means of getting the tracks they want and don’t need anything physical.

The purists will of course say that nothing beats vinyl, and several thousand pounds worth of kit no doubt, not including speaker cable at £11 grand a metre, however they are in a minority these days with the majority, me including, listening to music on portable, fruity or otherwise, devices.

The UK music industry is also as deluded as the HVM management given that they appear to want to buck consumer trends and still want generic music on ‘bricks and mortar’ stores. As we’ve seen with the rise of Amazon and play.com, consumers know what they want and, in general, price is the deciding factor. Despite select committees in parliament, actions by the UK Government, consumers are now dictating to the industry and retailers that they are in charge.

Laudable comments around the value of being able to touch and feel cameras, computers, CDs, DVD’s etc is irrelevant; those stores that do (or did) just became a free shop window to browse and buy elsewhere. I suspect that all that will survive will be specialist retailers targeting certain consumer groups that are not well online. There’s a local example to me that does both.

The question to other retailers that provide items that aren’t for direct consumption i.e. food, it’s a question of who is next and when; books maybe ?

Hello world!

Welcome to WordPress.com. This is your first post. Edit or delete it and start blogging!