Saturday, 16 August 2014

The Scottish referendum should not be decided by economists for or against.

There was once a conference  of Economist  with over a thousand delegates among st them was someone one totally had the answer to everything Macro and Micro economic, Who had a plan that ended boom and bust for ever end unemployment  resolved  world debt within a year.

Unfortunately no one knew who among st the delegates this genius was.

The problem with economics is that its not really a science . People tend to start from a political beleif and shape thier theory round that.

Yesterday Peter Black gleefuly under the title 

The economic illiteracy of the SNP's proposals for independence
posted that

The Guardian reports on the view by one of of the world's top economists that an independent Scotland's economy would crash within seven years if it tried to use sterling.

They quote Professor Ronald MacDonald , a currency expert who advises the International Monetary Fund and the European Central Bank, who believes that the Scottish government's plans to use sterling after a yes vote are fundamentally flawed, even if Alex Salmond's proposals for a currency union were accepted by the UK. He believes that in these circumstances, the Scottish economy would shrink by up to £100bn by 2023:
Former UK government adviser Sir Donald Mackay said there was "nothing to stop" an independent Scotland using sterling without a currency union.
This Ronald McDonald may just as well be a top economist for all we know.
 In a damning critique of  proposals, MacDonald said that independence would immediately mean that Scotland became a petro-economy. That would leave it heavily exposed to higher prices in shops, wage rises, a significant trade deficit and increasingly expensive exports.
Using IMF methodology, MacDonald said Scotland would face an annual deficit of 7% and would cut Scotland's economic output by at least £30bn in a best case scenario, or up to £100bn in a more likely worst case scenario by about 2023. "Clearly this is very, very bad news," he added.
It would greatly increase pressure for public spending cuts and tax rises, with a future Scottish government forced to impose a punishing austerity regime to balance the books, or face the prospects of an IMF bail-out, similar to the ECB's rescue of the Irish and Greek economies.

Meanwhile as seen above In a major boost to the campaign for a Yes vote for independence, f
In an extensive article, published on the day before Peter Black "economic illiteracy charge was made" Former UK government adviser Sir Donald Mackay said there was "nothing to stop" an independent Scotland using sterling without a currency union

.Professor Mackay analyses the substantial benefits of Scotland controlling its own resources, especially offshore revenue.He builds on previously criticism that the UK Government is ignoring “a mountain of black gold” in this sector, revenue that would of course go to an independent Scotland. Reports at Investors Chronicle suggested that the Westminster politicians were doing so to undermine the case for independence.Alongside Professor Mackay’s financial analysis, he confirmed on BBC Radio Scotland that morning that Scotland would be in a stronger financial position than the UK going forward. This is a highly significant intervention from a figure with considerable experience in enterprise and economic researchSo there you have So two conflicting statements almost at the same time from economists..Though Peter Black has apparently only seen one.

So it leads me to argue that maybe the future economy of Scotland should not be the basis of a YES or NO vote.

Maybe the issue should be on what kind of future the two sides offer whether Better Together who seem to think Scotland future lies wit a Westminster Government even a Tory one ideologically intent destroying the Welfare State and privatising the NHS or an Independent Scotland which still hold these values.

So yes I am saying people in Scotland should vote with their hears and not their heads because there is no clear scientific way to foresee the economic future.

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