Published:

How easy it is to scoff at Paul Ryan. He’s the most politically extreme Vice Presidential candidate in several generations. He’s the rockin’ Randian who spends his time tickling catfish and stalking around forests, bow-and-arrow in hand. He has come to prominence on the back of gruesome predictions about what the American public finances will look forty years from now. He is not my type of Republican and, given how his ‘Path to Prosperity’ budget plan polls, he probably isn’t America’s either. And so — scoff, scoff, scoff.

But before we all choke ourselves in delight or despair, it’s worth watching the full series of videos that he released to accompany his original budget plan last year. Here we have twelve minutes of a politician speaking about his country’s public finances. He presents graphs and proposals, talking of debt and spending cuts. His argument is clear and, for as long as the video lasts, it is persuasive. It may not be the fine print of Mr Ryan’s budget proposal (some of which is questionable), but it is still an admirably up-front attempt to engage people in a discussion that can be boggy and unclear.

6a00d83451b31c69e2014e87444f9f970d-500wi

Image from one of Ryan's YouTube presentations

There was similar transatlantic scoffing when Mr Ryan first released those videos, but not at the videos themselves. This was the time when Washington was mired in talks about raising the country’s debt ceiling. It went on for months, you’ll remember, with those crazy Congressmen opposing the White House with counter-demand after counter-demand, stipulation after stipulation. The markets started quivering at the thought of agreement never being reached. Oblivion awaited. And yet here, again, were politicians taking the time to talk about debt levels and spending cuts. It was not always as clear as Mr Ryan’s videos, but it was a striking and very significant debate.   


I mention all this out of insecurity. Perhaps there is actually cause for us Brits to be slightly jealous of Washington, with its Ryans and its debt ceilings. Debate about the public finances is hardwired into their politics, and has been for decades; whereas here it is anything but. And it shows.

The run-up to the last general election was a sad example of this. New Labour had never spent much time talking about the overall fiscal position during the boom years, but as the crash descended their obfuscation only grew worse. Alistair Darling’s Budgets made sure to conceal departmental spending cuts under figures for total spending. The opportunity to release a detailed Spending Review was declined. Gordon Brown introduced that wonderful concept of a “0 per cent rise” in spending. And then he confused the debt and the deficit (“cut the debt by half over the next four years”) in conversation with Gillian Duffy, a sin he only topped when he return to his prime ministerial car.

You’re probably thinking, “But that was then, that was Brown. Things are better now.” And you’d be right. The nature of the crisis means that we are all talking about the public finances a lot more than we did, with a legion of bloggers ready to digest any Budget and regurgitate it in a more legible form. And then there are George Osborne’s efforts to make the process more transparent and less subject to political connivance. The Red Books have been slimmed down and tautened. The Office for Budget Responsibility has done much to further clarify their contents.

But still the murk persists, some of it created by Mr Osborne. During his last Budget speech, the Chancellor took to claiming that — whether via lower-than-expected borrowing forecasts or one-off cash windfalls — he is “paying off the debt”. But, even though I’m one of those soggy sorts who thinks the fiscal consolidation is just as ambitious as it needs to be, I’d have to say this is untrue. The debt is still increasing over this Parliament, even though the rate of its increase is forecast to slow. It is around £1 trillion now. It is expected to be more like £1.4 trillion by the next election.

There are many more examples such as that — all of them adding, in their own small way, to the general confusion. It is so bad that, I’m told, some ministers still struggled on the difference between the debt and the deficit until surprisingly recently. And if they can’t figure that one out, is it likely that they know the difference between the deficit and the structural deficit? Or that the first one of these is also known as public sector net borrowing, and the second as the cyclically-adjusted current budget?

British politics just isn’t geared for a debate about the public finances as American politics is. It hasn’t had the practice. And this is not just a loss for the voting public, who are kept at arms-length from what’s actually going on, but for politicians too. It all comes down to narrative, which Bruce Anderson wrote about yesterday. Our parties have never really produced anything like those Paul Ryan videos to explain and justify their own policies. The Coalition has not struck a balance between instructiveness and simplicity. They are missing out.

And it is a loss for the economy as well. If the public finances remain a transitory, misunderstood part of our political debate, then there is a greater chance that they will be neglected again in future. This is one reason why Sajid Javid has been pushing for Britain to have a debt ceiling of its own. If a government wanted to increase debt beyond the cap, it would have to take it to a vote. Fiscal prudence — or at least the discussion of it — could be permanently etched into Westminster’s contours, a boon for future taxpayers.

None of this is to say that America — or Paul Ryan — has it completely right. Their fiscal debate contains its own share of mistruths, distractions and inaccuracies. But perhaps we shouldn’t be so quick to scoff in a westerly direction. There’s learning to be done all round.

Comments are closed.