Hello all: Ahead of Scotlands decision made this Thursday, especially after yesterdays post aimed to give you a compelling case to vote No in a positive fashion received a positive reaction, I thought I would post again. In this instance, I will attempt to explain another over complicated but increasingly nuanced facet of the No argument regarding economic deficits, especially involving mechanics of national and international economics which has been much criticised for talking down Scotland. Its not: its being realistic about the economic prospectus any nation can offer in a global market place. Ultimately, the choice of who the wining side of the referendum is will be your decision, but Im going to attempt to give you some more arguments which show that while Scotland could indeed survive alone, our thoughts should be with ensuring we thrive economically by being distinctively successful in the global market place as a part of the United. Kingdom, rather than simply fulfilling our existential economic necessities. Scotlands GDP is higher than that of the average GDP of the UK: indisputable fact. Scotland is a highly prosperous region of the UK: indisputable fact. It would be foolish for any campaigner on either side to dispute this, or indeed to claim otherwise. Scotland has massive economic potential, much of which remains untapped. However, the parties backing desperation havent given us much beyond a vision of how Scotland can be better, with economically sound policies that will stimulate growth, employment and productivity. Scotland hasnt done well in spite of the Union or despite of the Union, Scotland has done exceedingly well economically as partner in the Union, the fastest for wing economy in the. G7, and its time to acknowledge the economic success of Scotland as a part of the UK. Scotland is no subsidy junky, it contributes highly in terms of revenue, taxes, business, and innovation and skills. However, there are economic problems Scotland faces that must be coherently answered with conjectures of solid and rigorous thoughts, and for me, independence provides no answer to these problems, which should be fixed by a greater level of subsidiarity with wider political and economic changes made through more locally minded policies using a system that enshrines subsidiarity, rather than ill-considered constitutional change that will be irreversible and possibly damaging. These challenges, in my opinion, when laid out simply reveal Scotland could survive a transition to Independence, but that there would be severe problems economically. Lets attempt to discuss these problems: 1) Size of Scotlands Banking Sectors assets compared to the GDP of the nation. Its no secret our economy is heavily focused upon our illustrious banking sector, which provides mass economic benefits for the UK and Scotland alike, attracting international business and investment in jobs, infrastructure (like roads, water facilities) and in bringing the best academic research to the whole country. However: a nation needs to be able to support its banking sector during the troubled times of recession, and what we undoubtably saw in 2008 was RBSs colossal worth and how banks can become larger than their home nations. As a banking corporation, RBS is 12.3 times the worth of Scotland. It may seem odd that a bank can be worth more than a nation, yet we must remember banks outputs are far higher and they are more interdependent and reliant on International business than ever before: this means that when a bank crashed, like RBS almost did in 2008, Scotland would have struggled to intervene and aid a corporation than needed 12.3 times its national income to continue funding its operation. When banks are 24 hours away from running out of capital to find their operations, we need a large nation to help support our large financial sector, otherwise we should look to Ireland and Greece, whose banking collapses brought austerity far worse than ours because they couldnt provide economic emergency relief in terms of real term capital to banks as their economic situation was too dire. If a nation wants to be able to enjoy the successes of banking success, a nation must be fully prepared to counter the risk with a strong economic policy. But what does this mean for you guys, you may be thinking banking is the obscure realm of rich white men in suits, however in reality it affects every aspect of our existence: When banks collapse, people rush to withdraw money from banks, which creates a domino effect and will also devalue the money in your pocket, meaning as more of whatever currency an iScotland would opt to use in would be in circulation, thus its worth less. Therefore, it would be significantly harder to buy houses or cars, as mortgages will be only given to those who can give large deposits. Also, it could mean the potential loss of savings, meaning money you will work hard to save, or have worked hard to save will simply not be worth as much as it was, or wont exist up to a certain level or not at all. If this happens: you want a nation that is experienced in dealing with such problems, a nation that has the capital to support ailing banks, a nation that can support its people through rough economic times and can control its banking sector. 2) Debt and Spending Scotland is a wealthy country, but its not a country that doesnt spend much of its wealth of many different areas, meaning that while Scotlands GDP is higher than the average of the UK, it spends the highest amount per head per population of any area of the UK by a considerable margin. Scotlands deficit is roughly 12% of our national income, compared with a UK average of 6%. Such a high deficit means that a fiscal black hole would form, in turn, this would basically mean a government would have no viable option outside the creation of policies of austerity as spending is re-routed from hospital and schools into closing the deficit. Economically, we should aim to run on a surplus, not on massive debts that are increasing under unsustainable economic policies. Couple this with higher spending and it suggest we borrow too much and spend too much, suggesting that economically we must reconsider our policy. To borrow and spend, we need a strong economic framework to do so: which I am completely sure an independent Scotland could provide. Economically, the case for both the nation and for individuals quality of life suggests that it is a No vote that best handles our nations finances and leaves us in a more commanding place in dealing with a crisis. A no vote doesnt have to be negative decision and it doesnt talk down Scotland, but a positive reinforcement that the UKs economic strength is the best way forward for ensuring a strong future of unparalleled economic growth for Scotland.
Posted on: Mon, 15 Sep 2014 15:48:38 +0000
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