What are your thoughts on the election result?

I like to think that I'm not without some grey matter but I have to confess that I didn't appreciate the difference between the deficit and the national debt, probably because politicians don't really want us to, but then I saw a discussion between Victoria Derbyshire and Andrew Mitchell, he who believes that rules are for others, during which I was staggered to learn that George Osborne austerity package to reduce the deficit by 2015/2020/2050 or whenever has managed to double our national debt. Now we have JC, somewhat apt maybe, promising the magic money tree policies, and who wouldn't vote for free this and free that when only 5% are footing the bill, then what would our debt be then, I shudder to think.

It's very simple...

Each year, money comes in, money goes out from the government.
If more comes in than goes out, the budget is in surplus.
If more goes out than comes in, the budget is in deficit.

If the budget is in deficit, debt has to go up - because money has to be borrowed to fill that gap.
If the budget is in surplus, debt can come down - because some of that borrowed money can be repaid.

The budget has been in deficit since 2002, after a brief tick into surplus. The deficit rocketed in 2008. It's now back down to more historically normal levels, but hasn't made it into surplus again. Debt has, therefore, been going up rapidly. Debt is very high in £ terms, but massively lower than it has been historically - but, then, it's always been wars that have caused it to rocket before...

As relevant now as when Dickens wrote it, as are many of these quotes:

www.telegraph.co.uk/finance/personalfinance/9066005/What-Charles-Dickens-said-about-money-12-memorable-quotes.html

Micawber's quote is and always will be relevant, inflation doesn’t come in to it. Yes some controlled borrowing can be beneficial but only the financially illiterate, be that governments or individuals, spend more than their income over a period of time be that 1 year, 5 years or 10 years and never reduce the debt.

I appreciate that many people struggle with day to day living costs but debt is not the answer, don’t ask me how you solve that, I really don’t know.

The bottom line is cut your coat according to your cloth which together with Micawber are basic principles of sensible financial management.

Debt is not, in and of itself, a bad thing. Many households have large debt, many multiples of their income - and are immensely glad of the opportunity to do so. It's called a "mortgage"... Short-term debt also allows people to drive new cars, or provides the opportunity to spread the cost of large purchases such as washing machines or sofas. Almost every single company of any size has substantial debt - shareholders, bonds etc. Hell, if it wasn't for debt, we wouldn't BE here, because we wouldn't be able to lend money to our "peers", right...?

That's not to say that Micawber was wrong, of course. Managing debt is essential.

The UK's public debt is high, sure - 92% of GDP. It's not ridiculously high - Japan tops the table, 235%. France and Canada are both above us - 96% and 98%. But it is high - the US is 74%, Germany is 69%, the world average is 64%.

But if you want proof that debt is not inherently bad, and low-to-zero debt is inherently good, then look at the bottom of the table... North Korea - 0.4%. Tajikistan - 6.5%. DR Congo - 18.2%. Or even Russia, 13.7% - doesn't stop them from being hostages to changing world economic winds, because their low debt is a result of exports of a single commodity.

So how do we bring it down...? We turn government expenditure from deficit to surplus. How? Spend less, more income. Tax up, increase austerity. That'll help the economy...?

I'm no Labour supporter, but I did feel a bit sorry for GB. He spent 10 years trying to get TB out of No 10, and when he finally goes he leaves behind an enormous mess. It always made me chuckle when GB was PM the financial problems were caused by global forces, but as soon as call me Dave took over it was a problem made in No 10.

Ultimately, the problems of 2008/9 were brought about by people, business and Governments taking on debt with no realistic repayment plan. In my view the last thing we need is a load more debt.