If Scotland votes aye

[simply_the_best]

For any unsure of the currency situation, here's this from the New York Times...

Scots, What the Heck?
SEPTEMBER 7, 2014

Paul Krugman

Next week Scotland will hold a referendum on whether to leave the United Kingdom. And polling suggests that support for independence has surged over the past few months, largely because pro-independence campaigners have managed to reduce the “fear factor” — that is, concern about the economic risks of going it alone. At this point the outcome looks like a tossup.

Well, I have a message for the Scots: Be afraid, be very afraid. The risks of going it alone are huge. You may think that Scotland can become another Canada, but itÂ’s all too likely that it would end up becoming Spain without the sunshine.

Comparing Scotland with Canada seems, at first, pretty reasonable. After all, Canada, like Scotland, is a relatively small economy that does most of its trade with a much larger neighbor. Also like Scotland, it is politically to the left of that giant neighbor. And what the Canadian example shows is that this can work. Canada is prosperous, economically stable (although I worry about high household debt and what looks like a major housing bubble) and has successfully pursued policies well to the left of those south of the border: single-payer health insurance, more generous aid to the poor, higher overall taxation.

Does Canada pay any price for independence? Probably. Labor productivity is only about three-quarters as high as it is in the United States, and some of the gap may reflect the small size of the Canadian market (yes, we have a free-trade agreement, but a lot of evidence shows that borders discourage trade all the same). Still, you can argue that Canada is doing O.K.

But Canada has its own currency, which means that its government canÂ’t run out of money, that it can bail out its own banks if necessary, and more. An independent Scotland wouldnÂ’t. And that makes a huge difference.

Could Scotland have its own currency? Maybe, although ScotlandÂ’s economy is even more tightly integrated with that of the rest of Britain than CanadaÂ’s is with the United States, so that trying to maintain a separate currency would be hard. ItÂ’s a moot point, however: The Scottish independence movement has been very clear that it intends to keep the pound as the national currency. And the combination of political independence with a shared currency is a recipe for disaster. Which is where the cautionary tale of Spain comes in.

If Spain and the other countries that gave up their own currencies to adopt the euro were part of a true federal system, with shared institutions of government, the recent economic history of Spain would have looked a lot like that of Florida. Both economies experienced a huge housing boom between 2000 and 2007. Both saw that boom turn into a spectacular bust. Both suffered a sharp downturn as a result of that bust. In both places the slump meant a plunge in tax receipts and a surge in spending on unemployment benefits and other forms of aid.

Then, however, the paths diverged. In FloridaÂ’s case, most of the fiscal burden of the slump fell not on the local government but on Washington, which continued to pay for the stateÂ’s Social Security and Medicare benefits, as well as for much of the increased aid to the unemployed. There were large losses on housing loans, and many Florida banks failed, but many of the losses fell on federal lending agencies, while bank depositors were protected by federal insurance. You get the picture. In effect, Florida received large-scale aid in its time of distress.

Spain, by contrast, bore all the costs of the housing bust on its own. The result was a fiscal crisis, made much worse by fears of a banking crisis that the Spanish government would be unable to manage, because it might literally run out of cash. Spanish borrowing costs soared, and the government was forced into brutal austerity measures. The result was a horrific depression — including youth unemployment above 50 percent — from which Spain has barely begun to recover.

And it wasnÂ’t just Spain, it was all of southern Europe and more. Even euro-area countries with sound finances, like Finland and the Netherlands, have suffered deep and prolonged slumps.

In short, everything that has happened in Europe since 2009 or so has demonstrated that sharing a currency without sharing a government is very dangerous. In economics jargon, fiscal and banking integration are essential elements of an optimum currency area. And an independent Scotland using BritainÂ’s pound would be in even worse shape than euro countries, which at least have some say in how the European Central Bank is run.

I find it mind-boggling that Scotland would consider going down this path after all that has happened in the last few years. If Scottish voters really believe that itÂ’s safe to become a country without a currency, they have been badly misled.

[ratchet]

I keep hearing the yes campaigners banging on about It's Scotlands oil.

What's the fallback plan if (or when) Shetland etc decide they want independance from Scotland ?

[dvbuk55]

I keep hearing the yes campaigners banging on about It's Scotlands oil.

What's the fallback plan if (or when) Shetland etc decide they want independance from Scotland ?

Maybe the new Scots government wouldn't allow a referendum. Maybe that's the problem we've been too nice pandering to minorities.

[simply_the_best]

Just to lighten the mood

[fishtank]

I keep hearing the yes campaigners banging on about It's Scotlands oil.

What's the fallback plan if (or when) Shetland etc decide they want independance from Scotland ?

This I suppose sums up the position from a great deal of people south of the border, Scotland is not a region of England and it isn't an outlying island so the comparison is silly and insulting.

Scotland is already a separate and individual country that is only tied in a political and economic union with another three separate countries. I would imagine if everybody could get their head around that and understand its limitations we probably wouldn't be having this discussion, There never really was a United Kingdom politically, Just one senior partner and three very junior partners, I think that's where most of the animosity and the call for political and economic self-determination has grown from.

[IcanthelpthewayIam]

I keep hearing the yes campaigners banging on about It's Scotlands oil.

What's the fallback plan if (or when) Shetland etc decide they want independance from Scotland ?

This I suppose sums up the position from a great deal of people south of the border, Scotland is not a region of England and it isn't an outlying island so the comparison is silly and insulting.

actually the comparison isnt actually all that silly, if you look at why the Shetland islands became part of Scotland and in turn why Scotland became part of the union there is actually a comparable story behind both so it is actually a valid comparison(though just vaguely )

However taking Ratchets questions, SNP have repeatedly stated that Scotland independance its not dependent on the oil in the North Sea or Atlantic or where ever, they have said several times would could easily do it without oil revenues, just that those revenues are a bonus, and a pretty big one at that

[Danelectro]

Westminster who carries out its diktat, the Southerners are ruling the country as suits them and Europe so in effect it is a foreign power.

Ahh did you see what you did there!! you outlined the reason why many are voting YES.

Dvbuk your position on the CWU leadership is that it is a self serving elite in London who are only in it for themselves but when it comes to giving the establishment a bloody nose in the UK you abandon your position and turn into the Dingo of politics and you must obey London at all costs.

You've no idea whats happening up here in Scotland and I don't blame you when all you have is the mainstream media to fall back on and a few on here who would rather suck satans cock than concede a point in a honest debate.

[Gwynedd]

a few on here who would rather suck satans cock than concede a point in a honest debate.

That is really disgusting and no need for such a gross comment!

[simply_the_best]

You've no idea whats happening up here in Scotland and I don't blame you when all you have is the mainstream media to fall back on and a few on here who would rather suck satans cock than concede a point in a honest debate.

Honests points like pointing out Sturgeons lies on the NHS?

How's lower corporation tax creating a fairer society?

What have council tax freezes and free prescriptions done to spread the wealth?


All points or questions raised in this thread.

[dvbuk55]

Westminster who carries out its diktat, the Southerners are ruling the country as suits them and Europe so in effect it is a foreign power.

Ahh did you see what you did there!! you outlined the reason why many are voting YES.

You've no idea whats happening up here in Scotland and I don't blame you.

TBH Dan, I think you are deluded into believing that Scotland will rule it's own destiny even if you get a YES vote. It will be more a succession of compromises merely to survive. You believe that you will have the £ sterling, that you will automatically become a member state of Europe and those are neither assured and yet I don't hear any alternatives. If you do become an independent nation you will do well to keep well clear of Europe, even we have had a bellyful.

[Danelectro]

a few on here who would rather suck satans cock than concede a point in a honest debate.

That is really disgusting and no need for such a gross comment!

sorry if I offended but its nothing you wouldn't get at a Frankie Boyle gig

[mailman71]

Still waiting to hear from some of the yes voters what sort of job we will have if its a yes vote.
A lot of these yes voters will be voting themselves out of a job,royal mail Scotland will be a lot slimmed down from the staff numbers we have now.

[Danelectro]

You've no idea whats happening up here in Scotland and I don't blame you when all you have is the mainstream media to fall back on and a few on here who would rather suck satans cock than concede a point in a honest debate.

Honests points like pointing out Sturgeons lies on the NHS?

You need to read up on the TTIP agreement and also concede that the Private Finance Initiative that was used to build hospitals under Labour was the start of NHS privatisation.The TUC says that TTIP has grave implications for the NHS and theres just been a huge demo in London.The point Sturgeon makes is that it will become harder to maintain the NHS in Scotland when the overall budget is gong to shrink and then as in England forced to introduce charges for some services which the demo in London mentioned

How's lower corporation tax creating a fairer society?

I'm voting for independence and the breaking up of the establishment and not a set of policies. I would want the whole tax system redesigned to reduce avoidance and ill vote for a party that offers it.At present HMRC employ 3500 people to claw back an estimated £1.3 Billion of benefit fraud but only employ 300 people to chase up estimated tax avoidance of £27 Billion.

What have council tax freezes and free prescriptions done to spread the wealth?

Free prescriptions have helped a lot of poor folks. The SSP put forward a bill to replace the council tax with a local income tax but if I remember right it was blocked at Westminster.The real wealth is in the hands of the few and that needs to change within or without the UK

All points or questions raised in this thread.

[IcanthelpthewayIam]

Still waiting to hear from some of the yes voters what sort of job we will have if its a yes vote.
A lot of these yes voters will be voting themselves out of a job,royal mail Scotland will be a lot slimmed down from the staff numbers we have now.

with the SNP guaranteeing service levels as they are at the moment with the USO, also with the promise of renationalising RM, why exactly do you think there will be job losses?

[simply_the_best]

Ive posted a link earlier in this thread about Salmond supporting TTIP.



Folk on benefits and the working poor folk always received free prescriptions, so who benefited


Salmond has promised a lot of things to a lot of people without telling us how they cost, same as his idea's for Royal Mail, i might well keep the same pay and conditions but doubt they'll last long in iScotland, only a fool wouldn't concede that out postal system up here benefits from being part of the UK.