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  Paul - the deficit of £165bn is government spending going on now in excess of what the tax income is per annum. That is being compounded up and rolled up on top of the total debt and will double that debt to £1.4trillion by 2014.
  
  If you add the off balance sheet debt to that this figure looks like being nearer £3trillion by 2014. That is nothing to do with the bank bail-out which is not a long-term problem as it will be re-paid through selling the shares in due course. It is government spending that is the real problem.
  
  The £6bn cuts is no more than a small downpayment on reducing the overspend.
  
  The £165bn overspend must be dealt with in three ways:
  
  1/ Spending cuts to get to the root of the problem
  2/ Tax rises (mostly already in the pipeline and announced by the previous govenment)
  3/ Private sector growth - a priority for policymakers.
  
  The ratio between cuts and tax rises is expected to be 4:1 with cuts taking the bigger slice. Less than half of the deficit will be dealt with by growth and must be reduced to close to zero by the time of the next cyclical recession in 7/8 years.

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