It’s the economy, you stupid, stupid, stupid

I’m trying to get to grips with the election, as a voter.

It’s a very personal experiment, to see if an average voter can grasp the election priorities.

Someone once said ‘it’s the economy, stupid’. So let’s start with that.

Labour and Conservatives have the same election promise to get rid of the deficit and achieve a surplus, either within the next five years or after, and the Liberal Democrats said they will ‘deal’ with it.

My reaction as a voter

Sounds nice! We’re going to have spare money in five years time! When the UK has a surplus will we get a taxpayer’s bonus like the bailed-out banks give themselves every Christmas? Yeah! How about a public holiday to celebrate, like when Will and Kate got married?

I feel stupid to ask, but what is the deficit?

Brace yourselves. I’ve suffered unbelievably in researching this election promise. I could not have got my head around this without the benefit of an economist at my side to patiently explain over a bank holiday weekend. The answer requires the use of statistics.

Statistical manipulation is rampant by politicians and the media, because 1) they are not qualified to interpret or communicate them and 2) it’s in the interests of those who get it, to make sure the voters don’t get it.

Guess who got told off for confusing debt and deficit? It was naughty boy David Cameron

Ok, let’s forgive him, perhaps they don’t teach economics, finances or budget management at Eton or Oxford. Or perhaps they do, but the teachers there are not well-resourced, well-trained or the class sizes are too large for students like David Cameron to get the special attention they need? Perhaps the students are unruly and not ‘hard working’?

What is the deficit?

Here’s a free lesson if you’re up for the blind leading the blind. 

It’s about the difference between what the government puts in the coffers (income) and what it spends on the British public (expenditure), over a given time.

So let’s say I am the treasury: I have debts. I have a salary, and I spend money.

National debt is like the total amount that I have on my credit card, my mortgage (lol, I mean, rent – someone kicked out the rotten bottom rungs of the property ladder and replaced them with splintering agency fees), plus what I owe my brother for the Christmas presents last year, student loan,  public transport loan, all of it. Let’s say it’s £220,000. It seems huge to me. But there it is – mostly my annual rent makes it look out of proportion, and I had to pay £9,000 a year university tuition fees, unlike previous generations.

The deficit is the difference between how much I earn and how much I spend. 

Say I earn £26,500 per year and I spend £27,500 per year. This means my annual deficit is £1,000. Not so bad! But at this rate I’m adding maximum £1,000 onto my debt each year, on top of my existing debt.

I meet the minimum payments for my credit card, mortgage and I will pay my brother back, so it’s not like I’m filing for bankruptcy. Interest rates are low, and I can keep borrowing without getting blacklisted.

Still, I don’t want to add to this bad feeling that I’m getting more into debt each year. I can eliminate my deficit by spending less than I earn. Or I could earn more! I could invest in myself by getting a qualification in accounting to ask for a promotion. Who am I kidding, I’m a woman with young kids who hit the glass ceiling years ago! I’ll see what I can cut then.

What to cut?

  • Child care – time they looked after themselves. Wait no. I love my children. No help from the grandparents, they’re doing health tourism in Netherlands, or Portugal, I forget, it’s one of the 13 health systems in the EU better than the NHS, anyway.
  • Harp lessons for daughter Victoria – they say she’s a child prodigy, but she should start her ‘hard working’ future as a waitress at the local pub instead. Bless, she’s only 7 and child labour laws have been passed since Cameron’s ancestors were in power.
  • Nutritious food. Replace vegetables with fast food. Nope, Victoria’s gluten intolerant. I could join everyone else at the food banks though…
  • Stop buying clothes? I could buy from H&M and pass the suffering on to hard working Cambodian mums instead.
  • Home insurance. We might get burgled or burned down, but if we survive…

It’s tricky!

What are the tough choices for the UK?

Say I’m the treasury, the problem with my debt increasing is that it gets handed on to my children.

The Tories will eliminate the deficit by ‘reducing the benefits cap.’

The Conservative manifesto says:

  • Aim for full employment for all those willing to work
  • Use money saved in reducing the benefits cap to fund 3 million apprenticeships
  • Triple the number of start-up loans to businesses to 75,000

The Tories plan to take money from people who need help but are not ‘willing to work’ and give it as loans to those who can’t find a job, or hate their current jobs and have a dream to be their own boss.

Remember loans means money you have to pay back.

Entrepreneurship is damn hard. Aiming for full employment would require enough successful entrepreneurs to employ the people ‘willing to work’ out of the 1.86 million unemployed. How many are willing to work, Mr Cameron? And those high-flying entrepreneurs will repay the favour in their taxes, when they get huge, right? I have only ever met one successful British entrepreneur and you know where he pays his taxes?

The Labour manifesto says:

• No additional borrowing for new spending
• Raise minimum wage to more than £8 an hour by 2019
• Apprenticeship for every school leaver who gets the grades

If you get the grades? Isn’t the point of apprenticeships that they’re for kids who don’t do well on restrictive standardised tests, or don’t have the funds for uni, so they can provide cheap labour for hard working British businesses until the economy recovers enough to offer them real jobs on full pay?

The Liberal Democrats say:

… who cares, no-one believes they’ll stick to their promises anyway.

Why do we need to eliminate the deficit?

You might want to skip to the next bit ‘cos this paragraph has numbers – percentages and minuses. I wouldn’t blame you! The current national debt is £1.5 trillion and budget deficit is £56.9 billion, if I’ve read the charts right. In comparison with rich developed countries it’s right next to the US.  This OECD chart will make you wonder if the deficit matters that much to big economies. UK is at -5.3% in 2014, third worst after wealthy Japan (-8.4%) and bouncing-back US (-5.8%), and oh look! Greece is at a ‘healthy’ -2.5% in 2014, a massive cut from -12.7% in 2013 . You what, love? Greece has cut their deficit that much? La-la-la-la-I-can’t-hear you! No more numbers, this is pain!

It’s too much, but there are more devils in the details – and Labour, Liberals and Tories have differences in deficit wording, quoting usrname42 on reddit, ‘Labour (and the Lib Dems) only plan to balance the current budget, which allows them to borrow for investment, but not for regular day-to-day spending. This means they could, in theory, borrow billions of pounds a year more than the Conservatives’ – and more can be found in this report “Post-Election Austerity: Parties’ Plans Compared” on page 13 or 14. Go readers, you can do this! Or not, it’s ok.

Whoosh, over my head again!

What about the experts? They say austerity doesn’t work and austerity does so work! Ok, then, so I just gotta trust the government.

Why should I trust you? 

What do the Tories know about hard work? What do they know about apprenticeships or starting a business?

They’re on the illuminati list and are millionaires. David Cameron was worth 3.8 million in 2012 and set to inherit 25.3M more? George Osborne inherited £4.5 million.

So they’re used to handling enormous sums of money entrusted to them that they didn’t actually earn. Reassuring! But, it makes it hard to stomach these promises coming from a cabinet with a net worth of £70 million when it’s wholly non-entrepreneurial dosh! I feel like a serf!

The Economist has endorsed the Tories on the economy, not because they’re impressed but because of less risk.

I still have a lot of questions. And to be fair, I ask them mostly of the Tories, because people say they are the best placed to answer them.

The priority for me is to know we’re safe from bankruptcy, and that there’s a majority party with solid plans to nurture this fragile economic growth in a turbulent global environment.

Conclusion? It’s the economy, not the deficit

Banks and business get it and have their hand in influencing it.

I wanted to make sense of the economy, but I feel the parties are relying on voters’ ignorance, which just makes me defensive and I remember all the injustices of the last five years, and none of the gains. I realise I’m not very pro-Tory, but this is the news I’m bombarded with. Labour are less attacked because they’re in opposition, and they don’t say much about the economy.

I’m left feeling stupid, stupid, stupid.

With no confidence to make an informed choice on this issue, I’ll turn to other issues instead. Like, everything else important to me: education, health, ensuring a clean, safe and talented UK and ending mass surveillance.

I don’t want chaos, but if the results are a big muddle of not-enoughs, and it triggers electoral reform, then maybe one day I’ll get to vote in an election and feel like my vote was worth something. That would make researching party positions a lot more rewarding than this exercise turned out to be!


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