Nick Clegg, David Cameron and Margaret Thatcher all think the National Debt is too small

At conference Nick was implacable, you should manage state finances like that of a family home:

It’s [the UK Public Finances] the same as a family with earnings of £26,000 a year who are spending £32,000 a year. Even though they’re already £40,000 in debt. Imagine if that was you. You’d be crippled by the interest payments. You’d set yourself a budget. And you’d try to spend less. That is what this government is doing.

The economics is simple for David Cameron:

The country has got an overdraft. The interest on that overdraft is swallowing up things that the nation should otherwise be spending money on.

Thatcher was no less certain, a government should borrow like a household (thanks to LFF and The Staggers):

Why don’t you look at it as any housewife has to look at it? She has to look at her expenditure every week or every month, according to what she can afford to spend, and if she overspends one week or month, she’s got to economise the next.

How does a household borrow? We’ll look at a chart below the fold. Continue reading