There is now a strange air of unreality about the handling of the deficit. Osborne has made it centrepiece of his political narrative, although his prime motivation is not to reduce the deficit, but to shrink the State and the deficit gives him the pretext to do it. Even if it was his prime objective, he has utterly failed to carry it out since in his first budget in 2010 he promised to cut it to zero by 2015, and it actually turns out this year it is still a mountainous £90bn. He now promises to cut the deficit to zero by 2018-19 and to have a surplus in the last year before the election. Does anybody believe anything that this man ever says?

But given how mischievous his declared intentions and given anyway his total failure to achieve them, it seems odd for Labour to be proclaiming that it will match Osborne. No doubt that’s for reasons of economic credibility, even though Osborne represents such a poor benchmark for that objective. But far more important than all the sparring over matching Osborne’s plans is whether there is the slightest possibility of their being realised by 2018-9, and it’s pretty obvious they won’t be, and by a very large margin. Continue reading →