Difference between debt and deficit by the Centre for Policy Studies

Read the full report at http://CPSne.ws/QjJibO The Coalition came into office in 2010 with the stated aim that it would eliminate the current structural deficit by the end of this Parliament and stem the increase in public debt as a proportion of GDP. In A Distorted Debate: the need for clarity on Debt, Deficit and Coalition Aims Ryan Bourne and Tim Knox demonstrate that it now looks most unlikely that the Coalition will achieve either of these aims. Though the deficit has fallen by around a quarter since 2010, the cyclically-adjusted current deficit (the part the Coalition said it wanted to eliminate within five years), had only fallen by 13% by the end of 2011/12. The great majority of the reduction in the deficit has come from cuts to investment spending and tax increases, not from current spending cuts (the authors show that only 6% of the planned current spending contraction has so far been implemented). Do you know the difference between debt and deficit? Animation by http://www.leon.cat Centre for Policy Studies http://www.cps.org.uk