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19 April 2012


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Angus McLellan

Interesting stuff.

I notice that the difference between Scotland's geographical share fiscal balance 1990-2007 and the UK one is slightly less than difference between average UK (and by GERS' methods, Scottish) and Danish defence spending over the same period, which was 2.85% vs 1.63% using SIPRI data. (I use SIPRI rather than NATO data as this allows broader comparisons. For example Irish defence spending averaged 0.83% of GDP and New Zealand 1.3% over the same period.)

Ian Jenkins

Within what global fiscal framework will Scotland be operating?

Answer: Whatever the US decides that is acceptable to China.

A guide to the US position comes from the stances of democrat Barack Obama and republican Mitt Romney.

Both plan to reduce the deficit and debt by cutting public spending. The Economist reports: "Mr Romney has also promised to keep national defence spending at 4% of GDP, 50% more than the level it is heading for, even without the automatic cuts scheduled for January. That means he must shrink entitlements and other discretionary spending even more."

Maybe this republican surge in defence spending is because Romney says he will designate China a currency manipulator on his first day in office. The Economist points out this would jeopardise the most important bilateral relationship in the world. Who knows where this will lead.

Consequences for the rest of the world? This might give NATO a second wind.

Alan Weir

Interesting statistics indeed. One thought which naturally occurs, when looking at the huge differences between the Scottish (with geographic share) and UK balances in the 80s, and the enormous surpluses, relative to the size of the Scottish economy, in the early 80s, is where would Scotland's economy have been, in 1990, if those surpluses had been invested with a modicum of good sense in the Scottish economy, in infrastructure for example (or a mix of that and investment in a Scottish oil fund). (Whether invested by an independent Scotland, or a fiscally autonomous Scotland or even directly by the UK government.) I've no idea how robust a guestimate one could get for that, but surely the likelihood is it would be in a better place and the 1990-2007 percentage would have been higher.

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