ECONOMICS: Try living within means

I dislike politicians, but what I find particularly worrying at the moment is that I think I might be beginning to understand them and what they say. This only serves to reinforce my dislike.

Saturday, 17th December 2016, 5:00 am

Take the Autumn Statement, for example.

The only part that I liked was the Chancellor’s promise that it would be the last one. Thank the Lord for that.

The only other memorable part was the introduction of yet another silly acronym – JAM, which is generally accepted as meaning those families who are ‘Just About Managing’.

But if you look into it carefully, it is apparent it means different things to different people.

It is like that other politician inspired word, ‘Brexit’. Until a definition was recently published in the Oxford English Dictionary, no one knew precisely what it meant.

Once the definition appeared politicians stopped using it for a while, perhaps because people for once knew exactly what it meant.

Then some clever so-and-so realised they could start talking about soft Brexit and hard Brexit, and again no one knew what they were actually saying.

I am still not sure if the acronym JAM is a compliment or an insult.

Some reports suggest people who are in a JAM are just not trying hard enough, while others congratulate them on their control of their finances.

My view of families who are just about managing is that they have a certain income, from which they can pay their mortgage or rent, pay for all their food, bills and utilities, run a modest car, have a nice holiday and save a little each month for unexpected emergencies.

When I were a lad, this was called “living within one’s means” and was what everyone did. Is it such a bad thing?

Perhaps it would be a good idea if the Government was made to live within its means.

It could spend only what it could afford, repay its loans, and start to put something away for a rainy day. Dream on.

The Chancellor described the national debt as eye-watering. Mrs May said Government borrowing was approaching a cliff edge.

Does that mean it is not going to borrow any more? Just the opposite. It wants to borrow even more money to improve infrastructure (build HS2), improve productivity, and so on.

What it actually means is that it is having to borrow money to pay the interest on loans that it obtained to pay the interest on earlier loans it took out to repay other loans.

What a way to run a country.

In fact, the Government’s attitude to borrowing is much the same as that of the RBS bank. It borrowed more and more money to help it get bigger and bigger, which looked good on paper. Then the last crash meant there was no more money to borrow.

Look where RBS is now, eight years later. That is a scary thought.

Mel Shaw,

Church Street,