False Economic Policy Clichés and General Elections

General elections are depressing events, especially for those naïve souls looking forward to some enlightenment. Economic discussion fares particularly badly. It’s not just that it is cliché ridden, but that the clichés are the opposite of the truth.

Take today’s FT (13 April) which reports plans by Liberal Democratic leader Nick Clegg to ‘balance the nation’s books’ by ‘eradicating the current structural deficit’.

Either Mr. Clegg or the reporter Elizabeth Digby, or probably both, thought that balancing the government’s books was the same as balancing the nation’s books. At least Mr. Clegg never gave a hint of having thought about what the relationship between the two ‘books’ might be. He blundered on about ‘finishing the job of fixing the economy squarely’, by taxing and cutting fairly. He probably did not understand that the two types of fixing might be incompatible. An adviser might have told him.

All the parties have vied with each other in their promises to ‘balance the nation’s books’. The Conservatives want to eliminate the ‘structural deficit’ by 2018. Labour has promised to eradicate it ‘as soon as possible’, which at least is an improvement. None of the leaders have shown the slightest intellectual grip on the problem: that sometimes not balancing the government’s books is the one thing that enables a nation to balance its books.

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