The Labour Party manifesto: How will it all be paid for?

Unlearning what you think you know about budgets

Government budget balances are misunderstood. They are misunderstood by politicians, and even by some economists, and so they are misunderstood by the public.

They are misunderstood because they have been politically weaponised. Don't like the other party's policy? A criticism sure to land well is its "unaffordability". Voters listen because they spend a lot of time worrying about the budgets of their own households or businesses and make the intuitive leap that government budgets are the same, that there is a certain tolerable limit to its capacity to take on debt and that there are some things it just cannot afford. Prospect of Tory election win drives UK equity inflows But the British government is not a household and it is not a busi...