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Posted: Tue Nov 03, 2009 12:21 pm Post subject: The Economic Case for Indepedence..Sunk!
When the banking crisis broke last year, the UK Government had to find an emergency £28billion to keep the Scottish banks from going under overnight...
Today they have announced investments of another £30billion in the banks to keep them lending and to fund a needed restructuring....
Given that the Barnett allocation for about £29billion per year, this amounts to 2 years spending for the Scottish administration.
Banking crises occur every 30-60 years, so an independent Scotland which hosted a significant banking and commerce sector would face a crisis of this proportion every generation or two.... and could never hope to cope with it without severe economic problems up to and including national bankruptcy..
Isn't it time to put the tin lid on all the nonsense about independence and referendums?
We don't need it, and if we had it, there would be a poison pill at the heart of our economy with every significant bank that was headquartered in Scotland.
There are, of course, many pre-existing economic arguments against independence, but the banking crisis must be the killer, even for the most optimistic, irrational and emotionally convinced of SNP supporters.
Absolutely! It is evident that the UK cannot afford independence and must forget about such nonsense immediately. How much longer can that gang of criminals in Whitehall keep beggaring the taxpayers to keep the bankers fat? _________________ "My instinct is to agree with your opinion of his verse, but I've never so much as glanced at it." - agentmancuso
Absolutely! It is evident that the UK cannot afford independence and must forget about such nonsense immediately. How much longer can that gang of criminals in Whitehall keep beggaring the taxpayers to keep the bankers fat?
Seriously, is that the best you can do?
I have just destroyed your dreams and all you can do is make feeble jokes..
You destroyed my dream? Hardly! Besides, I was being perfectly serious. If your argument holds true, there is no case for the UK being independent. Do you accept that? If not, explain why the rules are different for the UK than for Scotland. _________________ "My instinct is to agree with your opinion of his verse, but I've never so much as glanced at it." - agentmancuso
How much is the UK deficit estimated to be over the next 2 years? _________________ "Gordon Brown mistook a glut of cheap money and a global bull market for his own administrative genius. In so doing, he wrecked the economy. Had the Prime Minister been running a company, instead of a country, he would be facing an inquiry into allegations of criminal negligence." - Jeff Randal
"Every single person on this planet is unique. Just like everyone else..." - Random Guy in Edinburgh Pub
"A democracy cannot exist as a permanent form of government. It can only exist until a majority of voters discover that they can vote themselves largess out of the public treasury." - Alexander Tytler
"There are four ways to spend money. A) You can spend your money on yourself, in which case you will strive for a mix of the best bargain and the best quality. B) You can spend your money on someone else, in which case you are still interested in a bargain, but the quality of the product or service becomes secondary. C) You can spend other people's money on yourself, in which case price is no object but quality becomes a great concern. D) Finally, you can spend other people's money on other people, in which case neither price nor quality is of great concern."
You destroyed my dream? Hardly! Besides, I was being perfectly serious. If your argument holds true, there is no case for the UK being independent. Do you accept that? If not, explain why the rules are different for the UK than for Scotland.
I honestly can't believe I'm having to do this...
anyway....
The upfront costs of saving the Scottish banks so far is about £60billion. The Scottish "GDP" is about £30billion. So we need to invest twice our GDP just to keep the banks afloat. Then there's the quantative easing and other costly measures to keep the show on the road and prepare the banks for recovery.
In all the UK is predicted to be in debt to about 70%-80% of it's GDP at the end of the process.
If Scotland was independent and had to bail out the same banks at the same cost, it would be a multiple (maybe 5 or 6 times) GDP, because the Scottish GDP is smaller than UK GDP.
It is obvious that a debt of 80% of GDP, while not desirable, is at least serviceable.
A debt of 5 or 6 times GDP is of an entirely different order, and would bankrupt any small country (think Iceland).
If that's not clear enough, then you probably have enough economic nous to replace John Swinney tomorrow....
Oh dear oh dear, you think the Scottish Parliament's pocket money is Scotland's GDP!
According to official Whitehall figures, Scotland's GDP for 2007 was 98.5 Billion Pounds, and you can be sure that does not include a true share (if any) of the value of our oil. _________________ "My instinct is to agree with your opinion of his verse, but I've never so much as glanced at it." - agentmancuso
You destroyed my dream? Hardly! Besides, I was being perfectly serious. If your argument holds true, there is no case for the UK being independent. Do you accept that? If not, explain why the rules are different for the UK than for Scotland.
I honestly can't believe I'm having to do this...
anyway....
The upfront costs of saving the Scottish banks so far is about £60billion. The Scottish "GDP" is about £30billion. So we need to invest twice our GDP just to keep the banks afloat. Then there's the quantative easing and other costly measures to keep the show on the road and prepare the banks for recovery.
In all the UK is predicted to be in debt to about 70%-80% of it's GDP at the end of the process.
If Scotland was independent and had to bail out the same banks at the same cost, it would be a multiple (maybe 5 or 6 times) GDP, because the Scottish GDP is smaller than UK GDP.
It is obvious that a debt of 80% of GDP, while not desirable, is at least serviceable.
A debt of 5 or 6 times GDP is of an entirely different order, and would bankrupt any small country (think Iceland).
If that's not clear enough, then you probably have enough economic nous to replace John Swinney tomorrow....
What exactly is 'costly' to the government of quantititive easing, other than some BOE stooge having to type numbers onto a screen? It costs them precisely ZERO. The after effects; however, could be incredibly costly. _________________ "Gordon Brown mistook a glut of cheap money and a global bull market for his own administrative genius. In so doing, he wrecked the economy. Had the Prime Minister been running a company, instead of a country, he would be facing an inquiry into allegations of criminal negligence." - Jeff Randal
"Every single person on this planet is unique. Just like everyone else..." - Random Guy in Edinburgh Pub
"A democracy cannot exist as a permanent form of government. It can only exist until a majority of voters discover that they can vote themselves largess out of the public treasury." - Alexander Tytler
"There are four ways to spend money. A) You can spend your money on yourself, in which case you will strive for a mix of the best bargain and the best quality. B) You can spend your money on someone else, in which case you are still interested in a bargain, but the quality of the product or service becomes secondary. C) You can spend other people's money on yourself, in which case price is no object but quality becomes a great concern. D) Finally, you can spend other people's money on other people, in which case neither price nor quality is of great concern."
Oh dear oh dear, you think the Scottish Parliament's pocket money is Scotland's GDP!
According to official Whitehall figures, Scotland's GDP for 2007 was 98.5 Billion Pounds, and you can be sure that does not include a true share (if any) of the value of our oil.
You're right. I was talking annual budget figures....
Even so, the UK debt in 2-3 years will be 70%-80% of GDP for all of it's borrowing, including saving the banks, while the cost of just saving the banks would be about equivalent to the entire Scottish GDP, never mind any other debts we may have.
And, as I've said, there would be no onus on Scotland's government to rescue overseas operations of banks based in Scotland. After all, those overseas operations pay taxes to other governments, so why should they be Scotland's problem?
If, for example, RBS had to liquidate its NatWest banks, why does that become a Scottish government headache or responsibility? I've already indicated that I think everything which has been done to stuff the bankers' mouths with gold has been a huge mistake, but the worst case, for me, would be rescuing operations within Scotland, not the entire businesses of these multinationals. _________________ "My instinct is to agree with your opinion of his verse, but I've never so much as glanced at it." - agentmancuso
Wrong! 1979 saw a referendum on devolution. There has never been a referendum on independence, ever, in Scotland. _________________ "My instinct is to agree with your opinion of his verse, but I've never so much as glanced at it." - agentmancuso
Posted: Tue Nov 03, 2009 10:46 pm Post subject: Re: The Economic Case for Indepedence..Sunk!
Braveheart wrote:
When the banking crisis broke last year, the UK Government had to find an emergency £28billion to keep the Scottish banks from going under overnight...
Today they have announced investments of another £30billion in the banks to keep them lending and to fund a needed restructuring....
Given that the Barnett allocation for about £29billion per year, this amounts to 2 years spending for the Scottish administration.
Banking crises occur every 30-60 years, so an independent Scotland which hosted a significant banking and commerce sector would face a crisis of this proportion every generation or two.... and could never hope to cope with it without severe economic problems up to and including national bankruptcy..
Isn't it time to put the tin lid on all the nonsense about independence and referendums?
We don't need it, and if we had it, there would be a poison pill at the heart of our economy with every significant bank that was headquartered in Scotland.
There are, of course, many pre-existing economic arguments against independence, but the banking crisis must be the killer, even for the most optimistic, irrational and emotionally convinced of SNP supporters.
<SIGH>
1. The UK borrowing requirement has extended to 1.4 Trillion pounds. That is one thousand four hundred billion pounds. The 60 billion for 'Scottish' banks is a gnat's tadgers worth.
2. Lloyds is NOT a Scottish bank, HQ is in London. Even before the LLoyd's takeover, although HBOS HQ was tacitly in Edinburgh, in practice 2/3 of the assets were assigned to Halifax and only one token BoS executive was retained on the joint board. I know, because I made the mistake of assuming HBOS was Scottish on a Brit forum about three years ago and had these facts rammed down my throat.
3. The British government has not donated money to these banks, they have bought shares at ridiculuously cheap prices.
4. For example, RBS only wanted a smallish amount of money to help with cash-flow but Brown and Darling insisted that they would have to buy the shares.
5. Short trading ensured that the share prices would be driven down but was only declared illegal the day after the UK government bought the Scottish bank's shares.
6. Banks like Barclay's were allowed to borrow billions from the likes of Qatar and Abu Dhabi on the quiet while Alex Salmond's suggested approach to the Middle Eaast was decried and ridiculed by Brown and Darling.
7. As long as most of the people most of the time thought Barclays etc. did not also need to borrow money, then good. That was the Broon sub-plot. 'Scottish' banks bad - 'English' banks good.
All British Unionists are scum, but if you choose to vote Labour then frankly you do really deserve to get them. _________________ "We have catcht hold of Scotland and would keep her fast." - Speaker, HoC, 1713
"No great mischief if they [Scottish soldiers] fall. How can you better employ a secret enemy than by making his end conducive to the common good?" - Wolfe, Canada, 1751
If British Unionists are scum, how about people who believe in the European Union? In case you haven't noticed, the age of the nation state is drawing to a close. The move to a truly federal Europe continues with Vaclav Klaus signing the Lisbon Treaty:-
Once that is in place, the ability of small member states to exercise a veto will be greatly undermined, removing many of the strongest arguments for separate Scottish membership. _________________ No more boom and bust - Gordon Brown
That'd be "the majority of Scots are scum" then......
a charming opinion from someone who presumably "loves" their country...
disgusting....
Where are the mods when you need them?
of course the mejority of scots voted for pro0union parties at the last election, so, aye, they are scum as well. maybe it's just nationalists that are not scum?
That'd be "the majority of Scots are scum" then......
a charming opinion from someone who presumably "loves" their country...
disgusting....
Where are the mods when you need them?
of course the mejority of scots voted for pro0union parties at the last election, so, aye, they are scum as well. maybe it's just nationalists that are not scum?
The word 'unionist' is open to interpretation, but yours is demonstrably absurd. Simply looking at the significant percentages of the voters for the 3 main 'unionist' parties who are actually pro-independence makes a mockery of your claim.
Furthermore, those of us who have campaigned for many years know from countless canvassings that even the VAST majority of those who are against independence are only minded that way because they believe that U-scaremongering about the economy of an independent Scotland might be true. This is easily ascertained by simply asking them 'If Scotland would be no worse off financially, would you be in favour of independence then?' I have asked that many times and the great majority answer that in that case they would like Scotland to be independent.
So I do not count any of the above as unionist and they make up the great majority of the Scottish people.
Now to the even more exacting term I used. "British Unionist". I have defined my meaning of this in detail, here and elsewhere many times in the past so I am not repeating that excercise. However I will simply state that my definition of 'British Unionist' is a Scot who would keep Scotland in the Union even if they knew for certain that most Scots would be worse off by doing so. They are not just British in identity, but are willing to do "whatever it takes" to preserve the Union. They believe Scotland must be saved from itself. They number a very tiny, but highly establishment empowered, percentage of the Scottish population. In the past I have discussed the various reason as to how they come into existence from pseudo-religious and racist reasons to deep seated inadequacies, to personal identity screw-ups but I'm not going into those here.
Suffice it to say these types do exist and it is those I refer to as scum because they have no respect for the truth, democracy or the aspirations of their own people.
Finally I point out that not all of those who vote SNP are nationalists either and the final irony is that British Unionists as per my usage ARE mostly Nationalists (but with a capital 'N').
_________________ "We have catcht hold of Scotland and would keep her fast." - Speaker, HoC, 1713
"No great mischief if they [Scottish soldiers] fall. How can you better employ a secret enemy than by making his end conducive to the common good?" - Wolfe, Canada, 1751
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