Two free lessons in basic economics for deficit-denying Edward Balls

As the repulsive Edward Balls prepares to take over as Chancellor in 30 months time, I’m happy to offer him two free lessons in basic economics as he doesn’t seem to have the slightest understanding of the subject. Though perhaps it’s not surprising Balls knows so little. The only “proper” job he’s had was as a journalist at the FT. Of course, that’s better than Osborne whose work experience consisted of folding napkins at Selfridges. But the FT spent years telling us that Britain should join the euro. As we’ve now seen, that would have been a disaster, but the FT hasn’t yet apologised for getting it so wrong.

Lesson 1 – In GREED UNLIMITED, I suggested Balls frame something like the following quote and hang it on his office wall, “Annual tax revenues £550bn, annual public spending £540bn – result happiness. Annual tax revenues £550bn, annual public spending £600bn – result misery”. In 2007, at the height of the Brown/Balls boom, tax revenues were £549bn and spending was £583bn, yet Balls still denies Britain had a structural deficit.

Lesson 2 concerns dealing with the results of the Brown/Balls financial incontinence. Government debt was £312bn in 2000 and £525bn by 2007. Then with the crash it shot up to £759bn by the 2010 election and about £1trn today. By the 2015 election it will be about £1.4trn. If the next government completely wiped out the deficit and was able to start repaying our debt at say £10bn a year (something that is virtually impossible), it would take around 90 years to get our debt back down to where it was at the end of the Brown/Balls boom and around 110 years to return debt to its level when Brown and Balls first started their spending spree with our money.

So what is Mr Balls’s solution to this catastrophe? Borrow more money.

One of the best quotes this week came from an American explaining why he would be voting for Romney – “because I don’t want America to end up like Britain.”