Because I had some rudimentary training in economics, people often ask me about questions about areas of economics I do not know a huge amount about. I know more than, say, my parents, or probably the average Oxford PPEist (concerning, given the education of most of the front bench of both government and opposition, so let's hope experience counts for something). Large swathes of macro policy often fall into this category.

So when people ask me about the current government's deficit reduction plan, I tend not to have a definitive answer. As far as I see it, the basic argument for deficit reduction now (rather than in two years, say) is that the size of our debt has created an atmosphere of uncertainty in the UK amongst consumers and business, maybe about the timing of future tax hikes, possibly about a Greek-style default (although this is silly). Anyway, confidence is low, so reducing the deficit and (eventually) the national debt in a transparent way may restore some certainty and allay the worst of these fears and get people spending again. Government spending, if too large, may "crowd out" private sector spending, which may be undesirable - there is no guarantee that government spending is the best (most efficient, most wealth-creating) type of spending.

To me, the flip side always seemed to be more tangible. A spending cut (which isn't one of those politically convenient efficiency savings) takes money away from somebody - either an employee of the government, or someone who sells something to the government. That's somebody who goes out and spends less money, either because they no longer have a job, or their business has lower profits. Less spending has a knock-on effect - if a large group of government employees are laid off, and all of them reduce their spending, that's leads to other business earning less revenue. Maybe some of those businesses have to let some staff go because they just don't have as many customers as before. And so on. It's called the multiplier, and it's been known about since Keynes.

The reason that I dither is that evidence is limited and, even if there are lessons from the past, they may not apply to this particular moment in time as easily. This recession is special, both in origin and in depth and length. However, the Economist this week drew my attention to two very different recent papers giving some indication of the possible effects. The first they describe as the intellectual justification for many government's programmes of deficit reduction - published by two Harvard economists, it finds adjustments to the structural deficit lead to short-term growth (increases in the national output). This is great news for Mr Osborne and Mr Cameron, who were also boosted last week by the IMF's backing of their "bold" deficit reduction plan. This approval is all the more surprising when you see that the second paper picked out by the Economist this week was written by the Fund itself. They have severe criticisms of the methodology of that Harvard study, which, when corrected using their own data on deficit reductions, reverses the conclusion.

Firstly, they find deficit reduction of 1% leads to a 0.5% fall in national output, and a 0.3% increase in unemployment. Secondly, deficit reduction by spending cut is less severe - however, this has usually be accompanied by lowering interest rates at the same time. It's worth noting that in the UK's current situation, there is ZERO scope for doing this, as the base rate is, to all intents and purposes, as low as it can go.

As I say, the current set of circumstances are special, so this is by no means conclusive, and actual answers will only be known looking backwards. In fact , if you ask me about it at some point down the line... well, I'll still dither. But I'll have a more pessimistic face on.

News coverage of important and complicated economic developments is often very helpful, but sometimes it leaves more questions that it answers. I was trying to get to grips with the Budget's implications for welfare this morning, but the few headline measures don't really mean anything if you don't understand how tax credits work. So this morning I spent a few minutes getting to understand the system and a few more minutes trying to model the reforms.

There are two main sorts of tax credits in the UK: Working Tax Credits, paid to those in work but on low incomes, and Child Tax Credits, paid to those with children. The two credits replaced the old Working Families Tax Credits, which basically did the same but in one go.

There is a maximum value for each component of each credit, which is reduced as your income increases. There is what is called the first threshold (presently, £6420), where earning below this means you get the maximum. At present, tax credits are taken away at a rate 39p for each pound earnt over that threshold. They are technically ordered as well, so that the first credits to be removed are working tax credits (which have a basic component, a component for being a lone parent or a couple, and a component for working over 30 hours a week), then childcare, then the variable components of Child Tax Credits (children, baby, disability) except for the family component (which is the basic fixed element). The family component remains at £545 until the second threshold, £50,000, and then removed at a rate of 6.7p for every pound earned after that.

OK so far? The key changes in yesterday's budget are that the rate of removal is being changed to 41p for each pound for all credits (including the family component of the Child Tax Credit) and that the second threshold is being reduced to £40,000 next year. The one change that hasn't really been picked up on is that the second threshold for the family componet will be scrapped in 2012-13, so the family component will be removed immediately after all other components are - I'll show an example in a minute, but it basically hits everyone earning from about £23000 to £40,000. The baby component is being withdrawn.

At the same time, the children component of the Child Tax credit is being increased by £150 per year (in real terms) and another £60 the following year. Currently, this component is £2300 per child. This shifts the benefits from tax credits in favour of the lowest earners. Added to this, the tax allowance rose by £1000. Anyone earning between the current level and the new level will now pay no tax, and anyone earning above it will pay about £200 less tax each year. Those who have been taken out of tax will gain between 20p (for the person earning £1 more than the old threshold) and £199.80 (for the person earning £1 less than the new threshold).

Ignoring the income tax issue for the moment, I wanted to figure out who is better or worse off from the tax credit changes, so I put all of this into a model and looked at changes for benefits for incomes ranging from £1000 per year to £70,000 per year. I just focused on families (single parent or otherwise) with children (not babies and not disabled), so they receive a working tax credit - maximum of £3810 if they earn below £9,000, £4,600 if they earn over that, because at that point you would expect the person works 30+ hours in a week and receives an extra £790 - a child tax credit (maximum of £2300 per child in 2010, £2450 in 2011 and £2510 in 2012) and the family component (maximum of £545). I ignored childcare credits and child benefit for simplicity and kept all other benefits and the first threshold constant.

If you have one child, you are better off in both years if you earn less than £13,000 per year, by up to £210. This is important for government aims about poverty - the benchmark threshold for poverty in the UK is around £13,000 (about 60% of median income). So any claims that this Budget do not hurt the poorest stand up to some scrutiny here.

Up to £17000, you gain in 2012-13, but lose less in 2011-12. Above that, the losses this year from the steeper withdrawl tend to outweigh the gains the following year from the higher children component. The total net losses are between £0 and £120, depending on income.

Families earning between £24,000 and £40,000 are not affected this year, as they only received the family component. Above £41,000, the family component disappears, so familes between £41,000 and £50,000 lose all or most of their current credits this year. Next year, families earning between £24,000 and £41,000 will lose the family component due to the scrapping of the second threshold. This is why it is surprising this reform hasn't been picked up on - it will affect a lot of people to the tune of £550 per year. At the same time, it's not surprising how little it has been mentioned, because it's a bit complicated to get at.

For example, if you have two children, the patterns are roughly the same, but the exact thresholds change, and the headline "Families to lose £550 per year if they earn a certain amount per year" wouldn't work well. In this case, it is families between £31,000 and £40,000 that will lose the family component of their tax credit in 2012-13.

One last thing is the income disregard change from £25,000 to £5000. This, unlike what I thought after my first reading, is not a threshold, but a way of dealing with unexpected changes in income. So you earn £12,000 the previous year and are given the appropriate tax credit payment for the coming year. At the end of the year you earn £14,000. The income disregard means you haven't got to pay any credit back if your income change is small enough. "Small enough" used to mean £25,000 a year, and will now mean £5,000 per year. A tightening of the belt, for sure, but not one anywhere near as scary as the magnitude of the numbers (a drop of 80%), once you understand what it is. And now you do too.

Anway, that's all the numbers. The welfare state is a topic which raises strong emotions, often at the expense of facts. I would want to do nothing about the emotions, but hopefully this will do something for the facts.

By the way, our tax and benefit system hurts my head.

UPDATE: Some attention now being paid to the middle income families issue.

I argued before that people needed to give Nick Clegg credit, rather than criticism, for trying to make a deal with the Conservatives. I believe that an agreement on a programme of government between them and the Liberal Democrats would best represent the country, and that the same people who argue for proportional representation needed to to acknowledge that it works both ways.

However, if an agreement can not be reached, then this ceases to be the case. Two parties that can't agree to a great deal and can't move on their own aims and those of the voters who supported them does not best represent the people. In such a case, an alliance of Labour and Liberal Democrats would be more representative of the country than a Conservative minority government.

Obviously, that isn't the only consideration, and the numerous media narratives that are currently going on show that their probably isn't one completely correct, iron-clad viewpoint. On one hand, many commentators have labelled the potential Lib-Lab government a 'coalition of the losers', whilst on the other hand, other have pointed out that the Conservatives are also not winners either. In fact, if you consider where the country was last year, when Labour managed 16% of the European election vote, you would have to summise that the Conservatives have taken quite a beating from the electorate too, whilst Labour did much better than expected. It's a confusing time.

Mainly, I think this is because the country at large is dealing with a new perspective on elections as the two-party system has fallen apart. A majority of people in this country voted for one of the two main left-of-centre parties. If they are the "losers", then we are essentially saying that the 36% who voted for the Conservatives are the winners, which is an odd mathematics at best.

I will say this though, as a trained economist. Screw the markets. I'm so sick of hearing about the "market's reaction to the uncertainty of a hung parliament". Firstly, it says a lot for our priorities when short-term market fluctuations could an important driver on much longer-term decisions. That's pretty much how the financial crisis started in the first place, and it's a psychology we need to lose. Secondly, the markets went down on Friday (uncertain government, failing Greece) and up yesterday (uncertain government, bailed-out Greece). One idea that presents itself to me is this: MAYBE IT'S FUCKING GREECE, YOU FUCKWITS.

Well, there you go then. Not the night I thought we were going to have at all. I must say I felt very depressed watching late into the night, especially after Dr Evan Harris lost his seat. Caroline Lucas' win was the only really pleasing moment.

That said, I think Nick Clegg is doing the right thing, at least morally. I believe in a more proportional system of representation. I think a country that is split between different ideas is better represented by a compromise, and a Lib Dem-Tory agreement is the best way to represent the most amount of people (60% of all votes we cast for those two parties). Now, had Labour and the Lib Dems enough seats between them to form such a coalition, I may have a different opinion, because the scope for agreement is greater, so whilst the vote share is smaller, the actual policies might be more representative. But they can't do it. They didn't get enough support.

The anti-Tory sentiment seems to be encouraging people to urge Clegg not to support the Tories. Maybe it's nice for some people to believe that they can keep the Tories out for another term, fair or otherwise. These people need to grow up. Get more involved next time, fight harder for what you believe in and put your trust in whatever system we will have then. If it's undemocratic that the Lib Dems get far less power from their share of the vote, it is just as undemocratic to deny the significantly larger support for the Tories yesterday.

I want to publically (in a fashion) thank Andrew Smith for being a good MP during the four years I have lived in this constituency, for replying to my letters, raising questions with his party's government and on occassion voing against them on matters of principle. In an ideal world, he'd have a safe seat and someone pointless like Blears would be losing her seat tomorrow. This is not, however, the way of the world, which is unfortunate because tomorrow I will be voting Liberal Democrat in the hope that this marginal seat changes hands.

I voted Lib Dem last time, and I guess they are my default position for most elections. Of course, they do not speak to my views exactly, so I do try to find a reason to support them more than any other party. In some cases, they don't go far enough (immigration, nuclear disarmament), and on others I just disagree (tuition fees, vocational training). However, of the three main parties, they are the only ones who I would trust to make expenditure cuts in the fairest possible way, to impose and cut taxes and to regulate our banks. They are strongest on civil liberties and have the track record to back it up. They share my progressive views on drugs and on crime, and have the longest standing environmental credentials.

Most importantly, however, I genuinely believe we have a chance, tomorrow, to forever change our electoral system. The more votes for the Lib Dems, the greater the imbalance in our first-past-the-post system will seem, the more unfair it will appear, the stronger the case for reform will be. I'm so tired of hearing how a vote for anyone other than Labour or the Conservatives is a wasted vote. If tomorrow marks the start of a long-overdue reform, no vote will ever be considered wasted again.

By the way, none of this is intended to influence anyone's vote, as if I had that power anyway. I just like recording things like this. I think it will be interesting to re-read them in thirty years time. However, I would echo Stephen Fry's call earlier to thoroughly consider the merits of re-electing Dr Evan Harris if you live in the other Oxford constituency. It is a tragedy that his intellect and uncompromising principles are an exception, rather than the rule.

This is exactly the sort of nerdishness I just can't enough of. FiveThirtyEight are, as far as I've experienced, the most thoughtful pollsters around (actually, they are complete statistics geeks) and last Sunday they released their latest UK model. First of all, they dispense with any assumptions of uniform swing, which means they are already further along than any other model being discussed. They use a full matrix of voting transitions from 2005 to 2010, and build in elements of tactical voting in each seat (that is, the shift from one party to another is more likely in close seats where the transition is to the second place party, for example). They also build in more regional variation, and things like incumbency advantage and shifts between voting and not-voting.

The current results are starkly different to anything else out there. Firstly, there is no chance, in this model, of Labour finishing first in seats with the third largest vote. The predicted seats based on the slowly stabilising vote share poll of polls position (Con 34, LD 28, Lab 27) give the Tories 100 more seats than Labour, although they would be short of a majority. The Liberal Democrats take 120 seats, 80 fewer than Labour. Because of the built-in larger swing between Labour and the other two in seats where they are more likely to win, the model penalises Labour more in terms of seats than, for example, the BBC's simple uniform swing model does. A Lib-Lab coalition doesn't have a majority either, although the margin is tiny.

Obviously, it's our quirky election system, so who really knows, and in a sense its just an academic exercise. But if this is close to what happens on Thursday, what a remarkable month it will have been.

Greek unemployment is over 11% and will almost certainly continue to drop. The UK's unemployment is about 9%, and has probably reached the bottom. Greece's S&P rating went from BBB to BB yesterday, thus crossing the threshold into junk bond territory. The UK's credit rating is the maximum AAA. The UK is not Greece.

What people need to realise is that debt can be willingly held by investors. In the case of Greece, it is not. In the case of the UK, it is at present. Would this change? Only if it becomes apparent that we can not service it - that is, if we can not pay the interest on it. Our tax revenues are likely to rise as the economy begins to grow again, and benefits are likely to fall. I know people get frightened by big numbers, but there is always a context. I don't know how you make this case convincingly to the public, but all the scaremongerers need to stop it. Mainly, I'm talking about the Tories, but Vince Cable this morning sounded no better.

That doesn't mean I think we shouldn't start to reduce our debt, but not for the reasons that are usually touted. Debt is a transfer of resources over time. With governments, this can be between generations. If debt is built up for investment, then the benefits of such investment will probably outweigh the costs of repaying it, so future generations are not made worse off. However, crisis management has a more immediate payoff and much less of one for people in 30 years time. It is not fair that the costs of that be paid by the future generations, nor that the government's ability to crisis manage should a similar thing happen again in the future be impeded by a shortage of cash.

I've broadly agreed with the consensus views on both televised debates so far. Clegg impressed more and mastered the format immediately in the first, whilst in the second things were a lot more even. Brown did well as the statesman during the foreign policy questions, but came completely unstuck with his attack on the Tories health policies for the elderly, leading to Cameron's strongest moment of the debate.

What I found most interesting was the immigration question in the second debate. By all rights, Clegg should not do well here. His parties view on immigration is far more liberal than the average British position. For the record, he's not liberal enough on immigration for me, but then no-one ever will be. I'm uneasy with the points system for that reason, but I completely support the idea of an amnesty, and the idea that it would encourage more problematic illegal immigration in the future holds no track with me. That said, he went on the attack against both Brown and Cameron, and came out looking like a guy who might be able to actually deal with a system that has become seen as broken. His line against the Tories was simple enough - if there is going to be a cap, what's the number? - and utterly rubbishes their policy as simply rhetoric. His response to Brown, however, seemed off the cuff, yet managed to be both genuinely funny and a real argument winner.

It's been a fun ten days. Surely, we must be on the brink of a completely new political reality.

I had an idea today. If the Tories get into power, Cath and I will get £150 for being married. I will promise not to touch it, and put it in a bank. We'd earn a little interest on it. Next year, I will pay a couple £150 plus interest to get divorced.

http://news.bbc.co.uk/1/hi/uk_politics/8602988.stm

This is an annoying debate from both sides. Firstly, a rise in employer national insurance contributions will likely lead to fewer jobs than a world where this did not happen. The economics is pretty simple to anyone familiar with a downward sloping demand curve. Any evidence based on past experiences of the form "last time NI went up, employment also went up" is nonsense, because we don't see the counterfactual: a world where NI didn't go up. Probably, in that world, employment went up even more.

I say probably in all of this because firm decision making tends to be lumpy, rather than marginal. I'm not convinced a large firm can distinguish expected profits from creating 18 new jobs and creating 22 new jobs, for example, especially in service and retail companies (which is where many of the Telegraph writers came from). I'm positive that actual research on this would yield mixed results across different firms.

All this said, there is a deficit to correct, and that money needs to come from somewhere. I'd rather Darling came out and made the argument that as we expect the economy to grow and employment to start to expand, we are raising NI contributions from employers as a way of raising extra revenue by sharing in the returns to this growth. After all, the government's deficit is partially the result of the support it gave to employers during the recession (including the giveaway to business that was the 15% VAT rate). That seems fair to me, certainly moreso that many other sources of tax income.

One of the reasons I will probably be a lefty until I die is this: when left-wing think tank produce lunatic ideas, they are generally framed in terms of 'quality of life' and other such terms of making the world a more lovely place; when right-wing think tanks produce lunatic ideas, they are generally about making more people more miserable.

Don't people know you can't launch a leadership challenge on a Prime Minister when the news has got so much snow to cover?

My thought? I don't like Patricia Hewitt. I remember her being dull, bordering on vacuous, but the interview I just on BBC News, where she managed to claim that a public call for a leadership vote is the best thing for the party is sort of hilarious, and as blatanly self-serving as she is pretending it isn't.

John Hutton, as Defence Minister:

"The individuals transferred to Afghanistan are members of Lashkar-e-Taiba (LeT), a proscribed organisation with links to al-Qaeda....

...The US government have explained to us that those individuals were moved to Afghanistan because of a lack of relevant linguists to interrogate them effectively in Iraq...

...The US has categorised them as unlawful enemy combatants and continues to review their status on a regular basis...

...We have been assured that the detainees are held in a humane, safe and secure environment that meets international standards that are consistent with cultural and religious norms."

Let's play a game called Spot Everything That Is Wrong With The Above. It's round one in a game called Spot Everything That Is Wrong With UK/US Counter-Terrorism Policies. To highlight a few:

- America pretty much decided their affiliation without a trial. Reprieve (a human rights charity) dispute this status for at least one of the detainees.

- Does "review their status" mean check they are still barely alive? Or check their assumptions weren't wrong?

- The relevant linguists explanation is the weakest explanation for anything ever.

- Perhaps the word "linguists" was a typo. For the word, "violent psychopaths".

- Assurances as to the high quality of conditions of imprisonment from the people you ask to covertly torture suspects don't carry much credibility.

- What do cultural norms mean for secret prisons? Because I'm fairly sure the cultural norm of a secret prison is nothing good.

- Aslo, what do religious norms mean for secret prisons? Muslims are allowed to pray five times a day? I think if I were in a secret prison, I'd be praying a lot more often than that.

What's the point of having scientific advisors if you only listen to them if they confirm your priors or support your political position? If you're never going to change anything, even if a respected scientist says you're basing your position on nonsense, why even bother having an advisory body?

I'm so tired of this empty debate about drugs. All governments ever say they are going to do is "fight against illegal substances", ignoring the fact that they are only illegal because they called them that. What we're trying to say is that there's hypocrisy in the distinction between those currently legal and those currently illegal, despite many of them being less personally and socially harmful (by a number of different measures) than nicotine and alcohol. If you can't get past an argument more sophisticated than "they're illegal because they're illegal", you're not the right people for this job.

Booom.

Barney Frank murked that shit.

Update: Colbert adds joy to already joyous event.

Here's a challenge. Watch Sarah Palin's resignation speech, and see how long you last. Not because she's saying anything particularly objectionable, but because after a certain number of minutes of hearing words unrestrained by grammer or sentence structure, you may actually start to feel dizzy, unsettled or even nauseous.

I made it to 10.11, when I was finally finished off by: "Life is too short to compromise time and resources and though it may be tempting and more comfortable to just keep your head down, plod along, and appease those who demand 'sit down and shut up', but that's the worthless, easy path-out, that's a quitter's way out and I think a problem in our country today is apathy. It would be apathetic to just hunker down and go with the flow. We're fisherman, we know that only dead fish go with the flow."

Then I thought I'd try to finish it, but a minute later this happened: "I've never believed that I, nor anyone else, needs a title to do this, to make a difference, to help people. So I choose, for my state and my family, more freedom to progress, all the way around, so that Alaska may progress, I will not seek re-election as Governor." And I rested.

On The West Wing, they would occassionaly do an episode where a conventional bit of liberal thinking was taken apart. In one episode, a gay Republican congressman argues with Josh over the Defence of Marriage Act, and Josh finally says "how can you be a member of this party". The answer given is that although gay, there was a lot more to the congressman's politics and beliefs than just his sexuality.

For most people, we rarely agree with everything the party we vote for has in its manifesto. You try and find the best fit. I tend to vote Liberal Democrat, but I was uneasy in 2005 with their stance on top-up fees, for example. This is unremarkable. However, for some people, there's a tendency for the rest of us to believe they can only care about one issue, and the LGBT community is one of them. It seemed incredible to Josh in that episode, and it apparently seems incredible to the government that according to a recent survey, 38% of homosexuals would vote Tory at the next election, even though the Conservative Party have had by far the weaker record on supporting gay rights (as acknowledged even by the respondents in the same survey)

The irony here is that this stance is in itself homophobic, implying that the only thing a homosexual cares about is being homosexual, and that the only thing they seek from a government is that it lets they be as homosexual as they want to be. Far be it for gays to be interested in the same concerns that have driven the nationwide decline in Labour support, or to care about a number of issues. A fiscally conservative gay? An anti-EU gay? How can you be pro-business or in favour of tougher immigration policies AND a homosexual? Where would you even find the time?

I find it hard to work out where the Conservative Party currently stands on gay rights, as I don't think the positions espoused by Cameron are necessarily spreading throughout his party, nor do I think he is definitely not posturing. I see nothing on the policy section of the website about gay rights (while I do see a section on the countryside). But it's one area that voters - all voters - get to decide about, and that includes heterosexuals who are also able to care about fringe issues like equality and personal freedom. Making it a rallying call against the Tories makes you as much of a hinderance to progress as the anti-gay Conservative party (if it even exists) that you want to stop getting into power.

Now, of course, I deeply want to see this play. I am often quite cynical of the "offensive comedy is satire" defence, because it's used so often, for things with no satirical target or purpose other than to shock. However, when done well (Chris Morris, Bill Hicks) it is also the most rewarding form of comedy - the ability to entertain while at the same time provoking actual thoughts about the attitudes you have and the undiscovered hypocrisies you carry around is an impressive skill.

But I'm inclined to give this play the benefit of the doubt, if only because this part of the linked news piece annoyed me:

"The play has received a mixed response from critics.

The Sunday Times found it "a seriously hilarious play", "provocative, swaggering, humane and edgy".

Shadow Children's Secretary Michael Gove said he was surprised the "dramatically appalling" work could be staged in the National Theatre.

"I thought that the humour was vulgar, raucous, obvious. It made Alf Garnett seem sophisticated," he told BBC Two's Newsnight Review."

Firstly, the positive opinion was from a critic. The negative opinion was from a politician. A politician has politicised public opinions. The reason for that is that the headline 'Top Tory supports racist play" carries more weight than whatever well thought out argument that led to it. Quite why we expect our politicians to have opinions on culture issues and celebrity news is beyond me. Maybe we don't. Maybe it's a media construction. But Gordon Brown volunteered his thoughts on Jade Goody's cancer. Why? Who knows. As prime minister, he should have no opinion on any one cancer patient. As a human being he should and likely does, but he only has a voice as a public figure, so it's entirely irrelevant what he thinks.

Secondly, Alf Garnett WAS sophisticated, and the fact that people continue to miss that fact is a constant source of upset. I had a conversation with my Dad recently about 1970s TV, and he said that there's no way Alf Garnett would be allowed on TV today. But of course it could, because it was sending up bigotry, rather than expressing bigoted views in a heartfelt way. Do try to pay attention.

The Daily Mail this morning is filled with hysterics about many savings accounts now facing zero interest rates, accusing the government of targetting help for borrowers (the reckless young people who created this whole mess in the first place because they don't care about morals or the family or the rule of law) by penalising the savers (the sensible old people who fought and died for this country, and had to scrape together everything they own with their own frail fingers).

Firstly, there are always winners and losers. If there were anyway of helping people without hurting others then it would already have been done. In times of crisis, those in control have to make an assessment of who needs help, and where is best to transfer that help from (whether its greater benefits paid for taxes, or great regulation which incurs costs to firms or whatever). The role of monetary policy (basically setting short-term interest rates) is to alter behaviour to control shocks to demand in the hope of maintaining steady (or equilibrium) levels of inflation and employment.

If demand-side inflationary pressures become strong, then interest rates will increase. This affects demand - people find it more costly to borrow, have less disposable income after mortgage payments have been removed, and find saving more beneficial. All of these things reduce the amount of money there is being spent, which eases inflationary pressures.

Currently, in the midst of the a downturn, where demand is falling, lower interest rates work along these same channels to achieve to opposite effects - more disposable income, easier borrowing, less incentive to save. While it is still effective (and with base nominal rates getting close to zero, it is reaching that limit) it is generally considered to most effect way of managing macroeconomic shocks.

The crucial point is that these are all short term changes. Once real variables are stabilised, interest rates will rise again. The issue that is getting confused here is that general idea that it is a good idea for people to save for retirement. It is, and and is also something that should be encouraged more as a long term goal. However, a government operates at the macro level, and while many individuals may suddenly find that their savings haven't grown as much as they expect this year and next year, they will also find (if they looked) that the recession that we are in, which will affect everyone, isn't as deep as it would be if governments (or central banks) had taken no action at all. Plus, savers have benefitted from higher interest rates during the last ten years when the economy has been doing well, which has come at the expense of borrowing and mortgage payers.

Plus, borrowers and savers aren't two different breeds of human. People borrow and people save over the course of their lifetime. In fact, many people do both at the same time, let alone during the lifecycle. Few people are Polonius. There will be times when interest rates benefit you and times when they don't. Overall, you probably do OK, given the long term nature of major borrowing and saving, and the short term volatility of interest rates.

So please, stop twisting sensible policy choices into a story about the government's attacks on the old and weak. Instead, go report on something you are well informed on, like the snow or some celebrity's battle with cancer.

If you want something to do between now and Thursday, why not write to your MP, and ask them to explain to you why Abdulmajid Hassan Ismail (Home Office reference J1104674), a Darfuri asylum seeker from the non-Arab Marareit tribe, currently being held at the Oakington Detention Centre, is to be sent to Khartoum on 11 December.

Mr Ismail faces the risk of imprisonment, torture and death upon his arrival in Sudan, not only because of his ethnicity, but also because his political activity, protesting against the Sudanese government outside their embassy in London. Sadiq Adam Osman, a deported Dafuri asylum
seeker, when interviewed by journalist Inigo Gilmore, stated that during torture in Khartoum, he was shown photos of himself at demonstrations in London. Mr Osman was fortunate to escape Sudan with his life, thanks in part to organisations like the Aegis Trust. Are the risks of repeating this episode really worth it?

Aegis point out that the Home Office made a commitment in the House of Lords not to remove failed asylum seekers of non-Arab Darfuri background from the UK to Khartoum, pending the outcome of the forthcoming country guidance case (then due to be heard in September 2008, now due to be heard in February 2009). It is too premature to go ahead with this deportation, given the possible risks and their incomplete assessment. Abdulmajid has 48 hours.