"The overspend"

The Spectator is trying to start a stupid and nasty habit. Fraser Nelson says:

Cameron should ban the word "deficit" and simply say "overspend" instead.

This week’s dead tree version of the mag contained two examples of this. And it has begun to leach out into other media.
Of course, calling the deficit an overspend makes as much sense as calling it an undertax - which is to say, no sense at all.
Equally obvious is the ideological intent behind this legerdemain - to make it seem clearer than it is that spending must be cut. I’m reminded (via John) of Daniel Davies' maxim:

Good ideas do not need lots of lies told about them in order to gain public acceptance.

Herein, however, lies a problem. We must distinguish three separate arguments for cutting public spending:
1. The macroeconomic one - cuts will somehow crowd in private spending.
2. The micro one - big government causes lots of allocation inefficiencies.
3. The philosophical one, that big government is an enemy of freedom.
I have much more sympathy for 2 and 3 than for 1. However - and this point is insufficiently appreciated across all political persuasions - there might be an acute trade-off between them. If, as I fear, the corporate sector’s long-standing unwillingness to spend has generated a tendency towards stagnation, then government spending, by default, becomes the engine of macroeconomic growth. We’re in the world of James O’Connor’s Fiscal Crisis of the State.
In this case, the aim of shrinking the state might be laudable on microeconomic or philosophical grounds but is dangerous on macroeconomic ones; cutting waste reduces aggregate demand too. As James Tobin said, it takes a lot of Harberger triangles to fill an Okun gap.

Comments

[Tom Freeman]

It's an odd and sad argument that Fraser makes:

(1) Many people, including many of my magazine's readers, are too dim to understand the difference between 'debt' and 'deficit'.

(2) Brown can use this fact to devious intent: he can say true things about the deficit and people will think they're much more impressive things about the debt.

(3) This would lead to political bias infecting the very way we talk about this issue, which would be awful.

(4) So, rather than suggest we replace 'deficit' with the commonly understood word 'borrowing', I'm going to use a word that exists solely to imply that public spending must be cut. Then we can have an honest discussion in neutral terms.

(5) Many people, including many of my magazine's readers, are too dim to notice the cheap stunt I'm trying to pull here.

[Luis Enrique]

I think your efficiency in point 2 is missing an "in"

[chris]

Ta, Luis - correction made.

[AMcguinn]

"Good ideas do not need lots of lies told about them in order to gain public acceptance.".

That might be a maxim, but is it true? I rather suspect that good ideas are much more likely to gain public acceptance with the help of lots of lies than without.

There is a separate question of whether advancing good ideas by telling lies does any good in the long run, but the evidence is not clear that any political activity does any good in the long run. After all, it is quite clear that ideas about which lots of lies are told don't need to be good ideas to gain public acceptance.

[alastair harris]

surely the point is that the voting public don't understand this even in simple terms. Cameron's job is to get past the gloss of Brown's spin of investments or cuts, in a way the voters can understand.

[vimothy]

Well said!

[Span Ows]

"Equally obvious is the ideological intent behind this legerdemain - to make it seem clearer than it is that spending must be cut."

Well it's not 'well said' really is it? Equally obvious because that's exactly what Fraser is saying, he isn't trying to hide the reason to change the description of deficit.

In fact Tom, in his 5 points (except number 5!) makes the point for Fraser (although that was hardly Tom's intent!) You may thing it a cheap stunt but it is to counter a cheap stunt. So, if you think it's a stupid and nasty habit then you have blame the cause of it: Labour spin.