The Performance Dimensions in Budget > What makes a budget credible?
Budget Credibility and Debt Service
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STONE:
Interesting times we live in. The eurozone is grappling with many issues: but wasn't there a basic point that was missed - a credible budget begins with some basic calculations of what has to be paid first and foremost - interest and debt. If that is not calculated properly and transparently how can any budget be credible? Isn't the basic question is the deficit more or less than 3 per cent of GDP and what does this year's deficit contribute to keeping debt below or getting it back to 60 per cent of GDP?
Martin Johnson:
You are forgetting the Golden Rule Simon ... make sure you get re-elected!
STONE:
Ah yes indeed the Golden Rule don't borrow for recurrent expenditure purposes - now would expenditure to be "re"-elected be recurrent or not? Does it have to recur each year or only every 4 or five years?
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