The post you are reporting:
David - he had run a deficit, not just a deficit, but a structural deficit from 2005. The economic slowdown started in 2007 and the banking crisis, the crunch, was in October 2008.
A deficit is not too bad, it is a normal thing governments do when you get an economic slowdown, they run up a current account deficit due the reduced tax income and increased demand for social security. What then happens (and this is Labour's favourite economic guru, Keynes who says it), is that you reduce and eliminate the deficit when the economy resumes the growth part of the cycle and debt gets repaid. It is quite logical that.
The position in 1997 was one of growth and a steadily reducing deficit in the correct manner (as per Keynes) and in the 1997 general election Brown said he would stick to Clarke's deficit reduction plans to try to blunt Conservative attacks in the election. He did, after a fashion, stick to that promise so we did see continued deficit reduction 'on the books' that is and in the approved Keynes manner.
But when that promise expired from 2001 Brown started increasing spending and reversed deficit reduction, so by 2005 there was no longer time to reduce the deficit before the next downturn, hence the structural deficit.
Of course we know now what was left off the books, the of-balance sheet spending switching huge revenue spending onto capital accounts through use of the expanded PFA scheme - so there was not really any real deficit reduction at all in the 1997-2001 period.
One further point - Brown made his infamous boast that he had 'banned boom and bust' - the problem is he ran the economy like that on the basis that there would never again be another slowdown. Utterly foolish of him and that is why we are in this appalling situation now and why we need such high cuts.
