Countdown to destruction!
The coalition uses the analogy of household debt to describe Britain’s horrendous public finances. The national credit card is maxed out as they say. To some this is either simple minded or dishonest, either way, they say, it’s wrong. Are they right?
The first thing is to highlight the difference between two terms which are often used interchangeably but which actually mean very different things; debt and deficit. The debt is the amount of money owed. The deficit is the amount by which that amount is increasing. It is a simple stock and flow concept; debt is the water already in the tub, the deficit is what is pouring out of the tap.
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