Fact-Checking Ed Balls

Ed Balls, speaking on The Andrew Marr Show this morning:

46.15 : “I don’t think we had a structural deficit at all in that period [i.e. leading up to the financial crisis]…”

47.14: “Was there a structural deficit? I don’t think so.”

The Institute for Fiscal Studies (page 6):

On the OECD measure, the UK had a structural budget deficit of 3.1% of national income in 2007. This is the 2nd biggest structural budget deficit among the G7 large economies (after the US) and the 4th highest of the 26 industrial countries for which the OECD has data.

’nuff said.

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25 responses to “Fact-Checking Ed Balls

  1. So true. I remember Gordon Brown talking about ‘borrowing through recession’ yet declined to mention that he borrowed through boom as well!
    See https://spreadsheets.google.com/ccc?key=0AonYZs4MzlZbdEdNdWlxdGhJVHE1WE9OYlVQazZUcWc&hl=en#gid=3 for full details – we’ve had a deficit since 2002!

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  4. I think you need to be a bit careful. A ‘structural deficit’ is not a real concept, it’s an educated guess at best.

    • In what sense is it not a “real concept”? It’s the name that economists give to a deficit not caused by the business cycle, i.e. not the cyclical deficit.

    • You are right.

      “Structural deficit” bears no more relation to our concept of economy than does a five pound note to our concept of currency. It’s completely abstract.

      Now, back in the real world…

  5. This extract from The Daily Mash sums it up:
    “…Senior Labour figures stressed the calculator watch … was simply there to remind the shadow chancellor that subtracting a larger number, such as an expenditure, from a smaller number, such as a revenue, leaves you with a negative number, such as a deficit.

    A source said: “Ed Balls still thinks we didn’t rack up a record breaking deficit in the two years leading up to the financial crisis. Probably because he doesn’t have a calculator watch.”…

    For the full item, follow this link:
    http://www.thedailymash.co.uk

  6. What a semantic arguement- id love to see the reaction on the doorstep if you marched up the path armed with this- a real tonic for people struggling with the policies of the coalition to know all of the above

    Just look at the last quarter of GDP Shrinking- even you cant blame Ed Balls for that but this is
    Typical of many of the subjects on this blog- totally divorced from what people are going through- and not even an apology for the hurt theyre causing

    • My blog is not a campaigning blog. I’m not attempting to convince people to vote for me, or a party for that matter. If you find the contents of the blog irrelevant and technical, then so be it – as this has been one of the blog’s busiest days for a couple of weeks, I’m guessing not everyone agrees with you.

      The whole idea of a blog is that it doesn’t have to have a mass appeal – you can choose a niche and supply it. Fact-checking things that politicians say is, in my view, a valuable and worthwhile thing to do – and I’m clearly not the only one that thinks that: http://blogs.channel4.com/factcheck/

      • When you run out of a logical argument on a subject like this, I find it’s always best to resort to an emotional one;

        “We can’t afford to carry on like this”
        “But it’s so unfair and hurtful and therefore wrong!”
        “Yes, but it’s not financially possible to carry on like this”
        “I’d like to see you trying to tell people that on the doorstep”…

        etc.

  7. Thank you for the clarification, it is a public service to inform politicians of the truth even if they cannot recall it or aren’t sure of it or even aren’t familiar with it…

    • He knows full well the truth, he is deliberately misleading the public, it remains to be seem whether he will be successful in doing so.

      Claiming that Ed Balls isn’t familiar with the economic situation during his time in the exchequer is laughable, much like the majority of his policy decisions.

  8. Although people may not fully understand a ‘structural deficit’ they do understand that even a government cannot contiune to spend £4 for every £3 it takes in tax. Long before the financial crash came along, Vince Cable was pointing out the confluence of personal debt and national debt, which is in total contradiction to Keynes.

  9. Ed Balls is the Coalition’s ‘sleeper’. He wants to destroy Miliband and take over what’s left of the Labour Party

    • Ed Balls is the Coalition’s ‘sleeper’. He wants to destroy Miliband and take over what’s Left of the Labour Party

  10. Isn’t it enough that everybody thinks ed balls is a fool rather than he open his mouth and remove all doubt?

  11. FAO

    theres no problem about telling people that we cant carry on as we were- but the solution as offered by the Lib dems is as is being proved in so many parts of the UK totally ineffective and will do nothing to stimulate the economy so that the deficit can be re-dressed

    if i am a little emotional i trust you will accept thats its meant in a positive way- and as for fact checking politicians -please- theyve all lied since time began and the Lib dems certainly cannot claim the moral high ground on that – and for Nicks benefit that can be easily translated in 3 words TUITION FEES PLEDGE

    Please tell me what is so bad about so saying how much this Con-Lib coalition is hurting people – you wrap yourself up in semantic debates about Mr Balls may or may not have said but youre totally out of touch with ordinary people – and there is no need for the extent and speed of what is going on cuts wise and youre in denial to suggest otherwise-

  12. Once again, we are discussing the defecit, who caused it and how to address it when in fact the National Debt is rising all the time. That is the issue that should be addressed.

  13. Like you, I am an Ed Balls sceptic, (http://bit.ly/hRQO0N) and I was underwhelmed last month by the line being taken on responsibility for the deficit by IPPR (http://bit.ly/f26vk2).

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  15. You seem remarkably well informed and very articulate. You must have had a bloody good politics teacher

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  17. “TUITION FEES PLEDGE” and of course labour weren’t the ones to introduce them, weren’t the ones that would have implemented Brown Review recommendations (including removing the cap on the level of fees that universities can charge), and weren’t the ones who did a complete U-turn when out of power for the sake of political points scoring.

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