What is the household analogy?

Politicians constantly claim that the government must “live within its means”, just like any family. In this video, I explain why the household analogy is not only wrong — it is the foundation of austerity, underfunded services, infrastructure decay, suppressed wages and collapsing public trust.

Governments create money. Households use money.

Governments must manage real resources, not bank balances.

And when governments cut spending, their income falls — the exact opposite of what happens to you or me.

Understanding this difference is essential if we want a better economy, proper public services, fairer taxation and a stronger democracy.