Snappy comebacks to stupid questions: the eternal undeath of the credit-card analogy

How to respond when the prime minister says something simplistic and wrong.

One of the most pernicious simplifications in mainstream politics is the "credit card" analogy. You know the one: the British economy is like a maxed-out credit card, and we have a responsibility to pay it off.

It's pernicious because the British economy is nothing like a credit card, maxed-out or not. Britain has control of the very currency in which it owes debt; it can print money to pay bills. On top of that, its effect on the economy which is its revenue source is so large that if it scrimps and saves in order to pay down its debt, there's a very real chance its income will drop by even more.

But the analogy is unkillable, and even if politicians don't cite it directly, they apply its lessons nonetheless—as Cameron did last Thursday:

Labour’s central argument is exactly that. They say that by borrowing more they would miraculously end up borrowing less. Let me just say that again: they think borrowing more money would mean borrowing less. Yes, it really is as incredible as that.

He may not have said the magic words "credit card" (or similar analogies involving "household spending" or "Britain plc"), but the same implication is made: the national debt, and macroeconomics in general, is no more complex than a family budget.

That's not true. But the thing is, even if you apply the same analogy, Cameron's claim is still over-simplistic. Here are just some ways borrowing more money can mean borrowing less:

  • You are unemployed. You have great ability, but few qualifications. You take out a career development loan to pay for post-secondary education. You get a well-paid job as a result.
  • You are unemployed. You have ample qualifications, but no smart clothes. Before the first of a string of job interviews, you borrow enough to buy a suit, ensuring that you win gainful employment and don't have to borrow money to eat.
  • You live in a 1950s prefab. With no real protection against the elements, an uncomfortable proportion of your monthly income goes on heating. You borrow money to pay for insulation, your expenditures drop, and you use the extra to pay off credit-card bills.
  • Annual income six pounds; annual expenditure six pounds sixpence. Result: misery. You borrow some money to put solar panels on the south-facing roof of you Guernsey house, reducing your spending on electricity. Annual income six pounds; annual expenditure five pounds, nineteen shillings and sixpence. Result: happiness.

I could write some detailed sophistry about how each of those analogies apply to Britain. The first is broadly equivalent to "upskilling"; the second to spending money on promoting Britain overseas; the third to fixing our much-vaunted "crumbling infrastructure"; and the fourth to investing in the Green Economy.

But I won't. Because the way to discuss the macroeconomy isn't through trite analogies and dumbed-down explanations; it's through discussions of the macroeconomy. If you want the best discussion of whether Cameron's claims are true, I recommend you turn to Jonathan Portes' exhaustive examination, or Duncan Weldon's blow-by-blow account of the squabble between the PM and OBR. You won't find many comparisons to your own financial situation, but that just means you're getting the good stuff.

Credit cards. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Why haven't we heard more about the allegations of Tory election fraud?

Police and prosecutors have joined a probe into election fraud allegations that could erase the Tory majority.

The facts

The Conservative Party is facing accusations of breaking election spending rules during its 2015 campaign. Following a Channel 4 investigation, it has admitted to failing to declare more than £38,000 of expenses, money it says was spent on accommodation for Tory activists.

It’s up to the Electoral Commission, which met this week with prosecutors and police forces, to decide whether or not to launch criminal investigations into this spending.

Allegations that the money benefited campaigns in individual seats have put the Tories in hot water – they may have illegally exceeded the constituency-specific spending limit. Making a false spending declaration in an election carries a punishment of up to a year in prison and/or an unlimited fine, and anyone found guilty is also barred from running in a general election or holding any elected office for three years.

But the party claims that, as the money was spent on “BattleBus” activists who were driving around the country, it counts as national spending from HQ, rather than being part of individual candidates’ spending.

The Electoral Commission, Crown Prosecution Service and representatives of 15 police forces met this week to discuss the claims. This has resulted in extra time being allowed (an extension on the 12 months allowed under the Representation of the People Act) for relevant police forces to decide what action to take.

Up to 29 Conservative candidates are thought to have benefitted from “BattleBus” campaigning, many of whom were fighting marginal seats.

As Channel 4’s Michael Crick reported yesterday:

“It will be interesting to see if they actually start naming constituencies where they think offences may have occurred. That would then put elected MPs, Conservative MPs, in the frame.

“And indeed, if they were to look at all the constituencies that we’ve been making allegations about over the last few months, it could actually endanger the government’s majority in the House of Commons.”

The conspiracy claims

So why haven’t we heard about this? It undermines the credibility of the entire Tory general election campaign. The claims could even constitute a scandal that would trigger by-elections across the country and potentially erase the Tory majority. The Tories have a working majority of 18, so if they lost in 18 by-elections (were at least 18 MPs to be found guilty), then they would lose their majority.

Some, particularly online leftwing voices, have accused the media of conspiring not to cover this story. Our rightwing press and the cowardly BBC, they argue, are ignoring a story that could potentially call the Conservative general election victory into question.

Anger about this story being low on the political agenda is understandable. It hasn’t been prominent, considering it could result in prosecutions (indeed, the Devon and Cornwall police force is reportedly already investigating, following its meeting with the Electoral Commission). And if, say, The Sun were a left-leaning paper, it probably would have framed it in a dramatic way that would have grabbed readers’ attention.

But there isn’t a media conspiracy of silence. BBC News has been covering developments since the beginning of the year, including similar claims about 2014 by-elections, and Grant Shapps MP (Conservative chairman during the election) was hauled onto the BBC Daily Politics sofa to respond to the allegations. And the BBC’s Today programme put the allegations to Communities & Local Government Secretary Greg Clark this morning. Channel 4 News has been investigating the story, and breaking developments, from the start. The Mirror has done a big investigation into each of the MPs’ campaigns that have been accused. And all of the main papers have published news reports on the story.

The reason it may seem like silence, or lack of due prominence, is because this is an ongoing investigation. So far there have been no arrests, and the allegations remain just that: allegations. Care is required by media organisations not to falsely accuse anyone of criminal activity. And, pushed by journalists, the Conservatives have given their side of the story, so we’re not going to get a great deal more from them. Now it’s up to police forces to decide to take action.

So far, the only things to report on have been what would and would not count as a breach of electoral law (rather a dry subject), and whether or not the Electoral Commission would achieve an extension on the time allowed by law for investigating (also somewhat technical). And, however dull, these things have been reported. They may not have been shared a huge amount online, or bounced to the top of “most-read” boxes – but this is because readers aren’t usually that interested in the ins and outs of the Representation of the People Act, no matter how much those who want this government toppled wish they were.

Anoosh Chakelian is deputy web editor at the New Statesman.