I know it says that I am an Economist somewhere around here but I am not really. It does occur to me that whilst a few folks here will know how to work out their bets, they might not have a clue about some of the terms being bandied about by the various liars looking for election; so here goes:
Budget Deficit (aka Public Sector Net Borrowing, PSNB)
This is the amount of money that the government has to borrow annually to make up the shortfall between what they want to spend and the amount of money that comes in from tax receipts and sales of assets. In 2012/13 this was £115bn, which was 7.4 per cent of GDP.
Primary Budget Balance
This is the Budget Deficit plus the money spent on interest repayments on existing Debt. Currently interest repayments represent the fourth largest annual outlay after social security, health and education.
Primary Budget Deficit
This is the level of the Deficit but not including money spent on interest repayments.
Structural Deficit
This is the level of the Deficit when the economy is at full employment.
Trade Deficit
This is when the value of Imports exceeds the value of Exports.
National Debt (aka Public Sector Debt)
This is the accumulated amount of money that the government owes over a period of years. This money is owed to Private Sector, Overseas and Banking owners of UK gilts (bonds sold to raise money). In December 2014, this was £1,483.3bn, which was 80.9 per cent of GDP. Currently a quarter of the UK National Debt is owned by the Bank Of England thanks to Quantitative Easing.
It is argued that the National Debt should include those debts such as pension contributions and Private Finance Initiative spending that are off balance sheet but still have to be paid.
Total UK Debt
This is the National Debt plus Private Debt, which is Household Debt, Business Sector Debt and Financial Sector Debt. This stands at over 500 per cent of GDP.
Percentage of GDP
This is the preferred way of measuring Debt or Deficit because this is relative, irrespective of the value of the currency or the size of the numbers. If the total real Debt increases but GDP increases at a faster rate then the ratio falls.
After World War II, the UK National Debt was over 200% of GDP. In the 1940s, 1950s and 1960s, there were very high tax rates generating extra tax revenues. The post War invention of the NHS and Welfare State plus European rebuilding led to domestic economic growth (triggering rises in incomes) and full employment (indeed immigration in the 1950s and 1960s to fill a labour/skill shortage). In the 1970s economic growth slowed as the ‘golden period’ of economic expansion ran out of steam and there was industrial strife.
Now as global growth slows, especially in what we have called the emerging economies, prospects for further reliance on high taxes from high employment to reduce the National Debt do not look promising.
These myths 
