How well do people understand the term ‘government deficit’?

Here’s an interesting poll finding from Yougov this week. They asked people the question “How well would you say you understand what people mean when they talk about the government’s deficit?” In answer, 69% said they had a very clear or fairly clear understanding. Not bad then. It’s talked about every day by politicians, so it’s good people understand what it means.

Not so fast though. Yougov followed up by asking “Which of the following do you think best describes the government’s deficit?” The majority (51%) thought “The total amount of money the government has borrowed” rather than the more correct description (“The amount of extra money that the government borrows each year”), which was only picked by 31%. 2% even answered “The total amount of money that everyone in the country has
collectively borrowed on overdrafts and credit cards.” Oh dear.

This is probably good news for the Tories. They can run around saying they have halved the deficit and most people will associated that with lower government debt (which people in turn tend to equate with their own household debt, where more=bad). It’s also bad news for people like me who want to try to explain to people that government deficits might not be an altogether bad thing, and that our government debt is not an issue that should supersede all others. It will also make me more skeptical about any future headlines generated from polling data!

You can find the full tables by clicking on the link above, but here are the headline figures. Interestingly, Labour voters were less likely to say they had a clear understanding of what a government deficit was, but they were no more likely to pick the wrong answer than supporters of other parties.

Screenshot 2015-01-19 at 6.04.16 PM

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10 thoughts on “How well do people understand the term ‘government deficit’?

  1. “.. rather than the more correct description (“The amount of extra money that the government borrows each year”)”

    Of course it might be “more correct” but we should all know that it’s still incorrect. It’s the difference between government expenditure and receipts, which is not the same thing. But maybe that was too “complicated” for yougov to put in the poll question.

    1. Under current arrangements it is true though. It needn’t be, but for now government spending is equal to tax plus borrowing. In the survey, 5% said none of the options applied. Maybe they were all MMTers!

  2. You could do a similar myth buster for “borrowing”. I suspect most people would assume that if the government balances it’s budget it will not be “borrowing”. However the Debt Management Office would still be busy flogging government debt to the private sector same as usual. The moot aspect is that “extra” part as written in your piece here.

  3. Reblogged this on SMILING CARCASS'S TWO-PENNETH and commented:
    Few ordinary voters really understand government debt and have for at least 35 years equated it with household debt- thanks to Thatcher- but it really is not anything like household debt; government debt is akin to you moving money from your savings account to your current account.

    Effectively, government debt is money they owe themselves!

  4. Indeed how can you possibly equate it with household debt? How many households print their own currency, then print bonds and sell them to people (some of them in the house) for either money in the same currency they or private banks have printed/electronically created, and then make the interest payments with further money you’ve printed?

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