So how has George Osborne pulled off the magical trick of maintaining spending on the police, imposing smaller than anticipated departmental spending cuts in general, and performing an expensive u-turn on tax-credit reductions, while remaining seemingly on course to turn this year's £74bn deficit into a £10bn surplus in 2020.
Well, it is because the government's forecaster, the Office for Budget Responsibility, has increased its prognosis of how much the Treasury will raise from existing taxes (not new ones) and reduced what it thinks the chancellor will shell out in interest on its massive debts.
In total the OBR thinks the national debt, the aggregate of the annual deficits, will be £23bn lower over the four years to 2020, and just because it is more optimistic about tax revenues and assorted costs.
Or to put it another way, George Osborne is today £23bn better off than he thought in July, and without doing anything at all.Now you don't see it; now you do ...
The Guardian comments:
Only a churl would point out that this is a plan built on thin air. That this is Enron economics, in which being told that you’ll get more money is the cue to start spending it right away. It’s not even as if the chancellor had found £27bn down the back of the sofa. He had found it down the back of a hypothetical, future sofa.