A Tale Of Small Numbers
Very brilliant use of small numbers to understand fiscal and monetary policy. Highly recommended for those allergic to arithmetic.
Tagline: Politicians like to talk big, but perhaps we – and even they – might have a better idea what they were up to if they counted small, suggests Michael Blastland in his regular column.
Click Here To Read A Tale Of Small Numbers
Introduction (Via BBC)
The language of politics is billions. Billions up, billions down, billions more, billions cut. Feeling dizzy about the state of the public finances when one telephone number of pounds succeeds another?
Here’s a simple alternative, a language politicians seldom use, perhaps because it would be revealing. This language uses small numbers like two, for example. Not a number to excite headline writers. But to see the big picture, you need small numbers.
Here’s how they work. Governments can only spend what they tax or borrow. They can only tax a share of what we, the public, already have. So it helps to know what share they want and then how they plan to share that out between all the things they want to do. Note that we’re talking shares here, or proportions. Not billions.
Excerpts (Via BBC)
Using small numbers like these enables us to see how the money we have available is moved around over time. It also shows us how big government is – a bit over 40 (out of 100) depending whether you measure with or without recession – and how much it borrows compared with its income.
If someone says they want more for defence, or more for education, we can say “what share?” or “and what other share does this share come from?” A bit more of the taxpayers’ share, a bit more of the share for transport? Tricky, only 1.5 goes to transport as it is.
