Douglas Carswell

Osborne economics means £12 debt for £1 growth

Imagine if for every £12 you spent doing something you got only £1 back. If your aim was to make yourself richer, I hope you would soon have enough sense to stop doing it.

Not so if you are the Chancellor of the Exchequer.

Over the past eight years since the financial crisis, successive administrations have tried to stimulate the economy by spending. For all the talk of "austerity", since 2007, government has spent £839 billion more than it has taken in tax.

The past eight years have seen, by definition if not by Treasury description, the biggest Keynesian stimulus in British history.

How much growth extra output has all this fiscal stimulus generated? £71 billion more.  Got that?  £71 billon more output for £839 billion more debt.  

A 130 percent increase in debt has been used to generate a 4.1 percent rise in output. Doh

Britain may well be the fastest growing economy in the G7. But we are the only economy daft enough to have spent £12 of debt to purchase every £1 extra prosperity.

Things might not feel so bad right now. But we can't go on like this.

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