Recently I wrote about ‘bad’ investments (‘Budgets, deficits and good and bad investments’). Yesterday the government announced a ‘commitment’ to increase defence spending to 2% of GDP (who said this was a good number? What is the ‘ right’ percentage for education, or health??), to build or buy 12 submarines ($150 billion!) and that defence spending would reach $1 trillion (yes that’s right) in 20 years (whenever that is).

These are classic examples of ‘ bad’ investments and also classic examples of poor information – a adding years of expenditure to get an attractive communications number that is, essentially, meaningless – do we add any other expenditure category for 20 years? And what chance is there that governments will adhere to these ‘decisions’ over the next 20 years without change? Answer:  None.Read More »