Economic nonsense

The Guardian reports:

Britain will be on the “path to ruin” if Labour takes charge of the public finances, David Cameron will say on Monday as he warns parents and grandparents of the dangers to future generations if the country fails to deal with its debts.

As Miliband accused the Tories of adopting “gimmick” tactics on the public finances by staging a Commons vote on their plans on Tuesday, the prime minister will accuse Labour of threatening higher interest rates after failing to set a date for the elimination of the deficit.

In a speech to party supporters, Cameron will say: “The choice is clear: staying on the road to recovery – or choosing the path to ruin.

“If we fail to meet this national challenge, the writing is on the wall. More borrowing, and all the extra debt interest that brings, meaning there is less money to spend on schools and hospitals and all the things we value as a country. More spending, and the higher taxes that will require – hardworking people thumped to pay for government wastefulness.

You might assume from this that, if the Tories get back to power in May, there will be no further borrowing by the government.  This, of course, would be blatantly untrue.  The Tory plans involve the elimination of the stuctural deficit by 2018.  Until that time they will have to continue with more borrowing, and "paying all the extra debt interest that brings".  The differential with Labour in terms of government borrowing would be marginal.

At present, the government is borrowing some £10 billion to £12 billion every month.  Whatever happens in May, that is unlikely to change significantly over the next two or three years.