Sue me Ed, if you dare.
As Fraser Nelson notes here, and then after the angry phone call here, Ed Balls has claimed that Alistair Darling's 2009 budget laid down plans to reduce the public debt.
Ed Ball's lied thus:
Alistair Darling in the budget set out plans which show the deficit coming down, national debt coming down.The problem is that he is using a measure of debt most people would not use, and measured on a basis no serious economist believes.
The statement is true if you think reducing borrowing growth to a level where the economy is growing faster is reducing national debt. Basically if you imagine a household budget, you are still increasing your overdraft every year till 2017, but you will get pay rises every year till then of 3.5% and in 2017, the accumulated debt will look like less in percentage terms against your wages.
The problem is that this is still increasing debt in net terms, and the supposed real terms decrease on which the lie is based is founded on the idea that economic growth will start right now, be sustained, (no double dip recession) and then go on the serial above trend growth over several years of 3.5%.
It all comes unstuck there for two reasons. First of all most people would still regard continued borrowing as increasing rather than decreasing debt, but secondly and most importantly it relies on amazing growth figures for years to come.
That is not going to happen because overall debt (government, household and corporate debt combined) is running at 400% of GDP whilst real interest rates are near 5% (not what the Bank of England base rate actually is, but what lenders are actually charging for new loans) which means that this lot could cost us 20% of GDP every year. Quite a lot of that money is going abroad to foreign lenders. It drains money from the economy.
Whilst it is possible that there may be a strong bounce back in growth after a recession as inventories are built up, it seems utter fantasy land that such a bounce would last several years with this much debt.
Hat tip to Manwiddicombe for the links to Fraser's article.