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.

Umaar Kazmi
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“They should be on bended knee apologising”: Chris Williamson warns Corbynsceptic Labour MPs

The MP for Derby North on his return to Parliament, why Labour won in marginal seats, and how party unity could have led to a Labour government.

At 5am on election morning, Chris Williamson was ceremonially tearing up some binbags. Two dustbin liners had been taped over the gold and green “Chris Williamson MP” sign on his Derby North constituency office since 2015. When it was announced that he’d won England’s most marginal constituency back from the Tories, he headed down to the old office with his team, and they tore the binbags down, dust raining upon them.

“Those black bin liners taped round were like a reminder whenever you glanced up that, one day, it’d be nice to pull that off,” he grins. In his two years away from the Commons, having been beaten by 41 votes last election, Williamson had been using the office as an advice centre.

Before then, the former bricklayer had represented the Midlands constituency from 2010 to 2015, having served as a local councillor – and twice as council leader – for two decades.


All photos: Umaar Kazmi​

Now he’s back, and squatting in a vegan-friendly café along the river from Parliament as he waits to be given an office. His signature flatcap sits on the table beside a glass of sparkling water.

“I’m not a fan of that place anyway, really, it’s horrible and oppressive, and not really fit for purpose,” he says. “That’s the slight downside. It goes with the territory I suppose. If we could move out of Westminster, that would be nice – somewhere like Birmingham or Manchester or Derby even – the centre of the country, isn’t it?”

“New Labour’s dead, buried and finished”

Perhaps this distaste for the bubble is to be expected, as Williamson is an ardent Corbynite. I followed him on the campaign trail before the election, and he was championing Jeremy Corbyn’s policies and leadership on every doorstep. It seemed a rather brave move among many undecided voters at the time, but has now been vindicated. You can almost tell from his trainers, crumpled polo shirt and contended expression that Williamson is supremely comfortable in the most left-wing Labour party since he became an MP.

“New Labour’s dead,” he says, his eyes twinkling. “No doubt about that. It’s dead, buried and finished. It's a regrettable chapter in our history. Historians will think ‘my God, what were they doing?!’” he cries.

Williamson believes he won due to Jeremy Corbyn’s character, the manifesto, a “fantastic” local campaign, and an “outstanding” national campaign. He thanks Momentum activists rallying so many people that they often had 20 teams canvassing simultaneously in his seat. And he praises an online campaign that targeted different demographics – Ukip voters in particular would mention his videos.

“If they’d been more supportive then we’d have got over the line”

“We targeted some elements of our campaign to specific cohorts,” he says. “For example, we did a message online to people who had supported Ukip previously about how a Labour government would genuinely take back control, take on the corporations, bring back the utilities into public ownership – rather than controlled by international, global corporations many of which are ripping us off.”

Williamson adds that young people were enthused by the pledges to scrap tuition fees, abolish zero-hours contracts and raise the minimum wage. He also saw Tory voters switch, attracted by a policy programme that he describes as “common sense” rather than radical.

He admits that people warned him to “disassociate yourself from Jeremy if you’re going to win” when he began campaigning. But he tells me he would “have sooner lost than gone down that road”.

But he has strong words for those who were more sceptical, saying they “let down their members” and lamenting that “if they’d been more supportive over the intervening period, then we’d have probably got over the line”.

Williamson calls on all the Corbynsceptic MPs to apologise: “They should be down on their bended knees and apologising, in fact. Not just to Jeremy but to the entire Labour movement.”

However, he believes his party is “more united” now than it has been for the 41 years he’s been a member, and is happy to “move on” – expressing his gratitude for how much warmth he’s received from his MP colleagues, “given how critical I’ve been of them!”

It may be Chris Williamson’s time in the sun – or the “sunshine of socialism” as he puts it, quoting Keir Hardie – but he does have jitters about his majority. It is 2,015 – the digits matching the election year when he was defeated by the Tories. “It’s a reminder that we lost then!” he laughs.

> Now read Anoosh on the campaign trail in Derby North with Chris Williamson

Anoosh Chakelian is senior writer at the New Statesman.

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