BBC: Scottish economic growth outpaces UK "Scottish Finance Secretary Derek Mackay said the latest figures showed that Scottish growth was both pulling ahead of the UK and outperforming the official growth forecast." This is Derek Mackay, the SNP's Finance and Economy Secretary, and he is as happy as a pig in a pigsty with the bad deal Fiscal Framework Agreement which imposes derisory, very severely limited borrowing powers on the Scottish government which stunts the growth of the Scottish economy by world standards. The Scottish economy is not growing strongly by world standards but it can and it will if we do this. Instead of comparing Scotland with the UK, let us compare the UK's and Scotland's growth performance with the other countries of the world. There is a Wikipedia page "List of countries by real GDP growth rate" which lists 192 countries in order of growth rate. At the top is Libya with a freakish growth rate of 55.1% 2nd top is Ethiopia with a growth rate of 8.5% Bottom is Syria with a growth rate of MINUS 12.4% - so its economy is contracting by 12.4% So where is Scotland and the UK ranked in the world growth list? Over the last year, Scottish GDP had risen by 1.7%, while the UK’s is up 1.3%. Scotland's 1.7% would put us at around 150th in a list of 192 countries, which is in the bottom third of the table . The UK's growth of 1.3% would put the UK at 163rd in a list of 192 countries. Actually "the UK" is not listed, but England is at 165th with a growth of 1.2%. So by world standards, the UK's economy is not growing strongly and is dragging Scotland's economy down with it. So it is my duty to explain to my fellow Scots why that is. UK Tory incompetence The UK's low growth is caused by the incompetent policies of the UK government, most especially the fiscal conservative / austerity policies of the UK Treasury - the cuts in public spending with a view to reducing government borrowing, trying to balance the books and maybe even have a budget surplus in some months. To understand why such policies cause low growth, you must learn some basic economics. ECONOMICS - 101 Excluding the government, the rest of the country saves more than it borrows. Those net savings threaten a reduction in the money supply and a recession. To avoid recession, to try to grow the economy, the government must re-inflate the money supply and to do so it has two possible methods, (1) the responsible method which can work well to grow the economy - government borrowing from its own central bank to fund a fiscal deficit, spending more than is raised in tax, (2) the irresponsible method which is very inefficient - loose monetary policy of the Bank of England - very low interest rates, easy loans if you know the right people, no need to turn a profit with a successful business, just having the right connections to the bankers is all that you need to get that big loan, a membership of the Tory party helps a lot - and quantitative easing - blatant giving away of £100s of billions by the Bank of England, buying "assets" or IOUs from the best (Tory bankster) friends of the Governor of the Bank of England. So Economics 101 explains how the Tory banksters steal the people's money to use for their own pleasure, robbing the people's money that the government should be investing in the productive economy. Any budget surplus simply adds to the cash that the Bank of England can give away to the banksters. The lower the borrowing, the greater the surplus, the greater the cuts, the higher the taxes, the more intense the austerity, the more the people's money is robbed by the government for and on behalf of the banksters. And it is daylight robbery, in front of the noses of the people, with the full connivance of their (Tory - True Blue, Red Tories & Tartan Tories) elected representatives. To understand what Scotland could do differently to grow our economy strongly, to put us in the top 10 growing countries in the world, we must understand where the Scottish government is going wrong in agreeing and going along with the fiscal conservative / austerity policies of the UK and that is what I will turn to next. Sturgeon dropped the ball The Scottish government has never had the normal power of a government to borrow interest-free from its own central bank to invest for economic growth and prosperity. Borrowing powers for Holyrood have always been very severely restricted but in 2016, the Scottish government was given an opportunity to say whether or not the Scots agreed or disagreed with not having the normal borrowing powers of a government. The SNP say they want independence and the SNP claim they want the Scottish government to have the levers of power to grow the economy but when presented with the chance to get much better borrowing powers, the SNP government of Nicola Sturgeon dropped the ball and foolishly signed up to a Fiscal Framework Agreement which once again imposed derisory, very limited borrowing powers. Swinney negotiated a bad deal with the UK Treasury, Sturgeon signed up to it and now that Derek Mackay is Finance and Economy Secretary he is as happy as a pig in a pigsty with the rotten bad deal rip off fiscal framework which dictates that no finance secretary can borrow sums of the order of £10,000,000,000 - ten billion pounds - every year interest free from the Bank of England. So that is where the Scottish government and Holyrood MSPs are going wrong - they have agreed an austerity / fiscal conservative fiscal framework with the UK - agreed it then and they still agree it. What they should have done - what they should do now, right now - is finally to DISAGREE with the fiscal framework, disagree, repudiate, renounce the fiscal framework agreement and DEMAND a new deal with greatly enhanced borrowing powers. Until Scotland gets a new deal fiscal framework, our economy will not grow well by the best world standards. Sturgeon will boast that her government is doing well by UK standards. If we are honest with ourselves as Scots, if we take pride in how we could grow our economy much more strongly given the right policies, we must blame Sturgeon for stupidly agreeing a bad deal fiscal framework. Blame Sturgeon and sack Sturgeon because she is indeed clueless and she takes bad advice from poor advisers like Anton Muscatelli and Gary Gillespie. Peter Dow Science and Politics http://scot.tk
It's a shame to see someone fail Economics 101. Saving's don't reduce the money supply. Your savings get invested. The money is lent out to people in the economy who have more productive use for it than you do. A bank does this with your money, or a pension fund does the same. Unless by savings you mean cash money stored under the mattress. So you entire theory is based on a flawed premise. Back to the drawing board old son.
OP 'happy as a pig in a pigsty' That's the polite version - the vernacular one is 'happy as a pig in ****'? (I typed those asterisks to outwit the rude words software. )
Net savings = the total amount saved MINUS the total amount borrowed So yes that importantly includes "cash money stored under the mattress" or in home safes or in company vaults which contributes to net savings and that portion of money borrowed which is not spent immediately but saved again. With very low interest rates, a saver has less to lose by saving in cash, as opposed to depositing savings in bank accounts. There is also less of an incentive to move money from current accounts to deposit accounts. Banks are less likely to lend the money in current accounts out because they need to be able to pay it all out at a moment's notice. Additionally, don't forget the black economy, which thrives at times of low interest rates, where off-the-books cash transactions and savings would be the norm. Imagine a bankster who pays himself a bonus of £1,000,000 and spends £500,000 on prostitutes and cocaine for the parties he hosts for his friends and on bribes for the corrupt police to make sure no-one gets arrested or prosecuted. Suppose the bankster's pimps, drug dealers and corrupt police are working in the black economy and from the banker's payment to them of £500,000 they save £100,000 in cash. That's 10% of the banker's bonus which is contributing to net savings.
If all you are worried about is the cash money people have in their piggy banks and under their mattresses, then you have nothing at all to worry about. This is peanuts. As a reality check, how much of your net worth do you have stashed around the house in cash savings? Effective zero. Nothing. Banks lend 90% of all holdings. Savings account, current account. Makes no difference. The 10% they keep back is to cover any withdrawals from your current account. At the end of the day, it's recalculated. And they have to borrow any shortfall ready to have 10% available again tomorrow. (Typically it's borrowed from a cash business like a shop or from another bank). Money in the black economy is working money. Drugs are being dealt. Plumbers are plumbing. Antiques are being bought and sold. Money being spent on hookers, is consumption. The money is flowing in the economy. Hookers buy dildo's and make up and frilly knickers. Also food and housing and hairdressing etc. The taxman doesn't like the black economy. But everyone else does. Now lets deal with expanding money supply. Econ 102. This relates to the laws of supply and demand and inflation/deflation. In practical terms, it makes no difference to the end user how many £ we have to draw upon. £1 has 100 pence so I am not going to run out of units of measurement to play with. Denomination is not an issue. Only value is. If I add more goods to the economy, their value in £ becomes less. Deflation. If I add more £ to the economy, it's value in goods becomes less. Inflation. Adding or removing currency from the economy does not add or remove any productive capacity or wealth. No goods or services are added or removed. If I add more currency, print money, quantitative ease, I create inflation. This pisses people off. I reduce the value of their £ by a number = the amount of £ I print/ total amount of £. It is theft. It steals wealth. Redistribution from the owners of £ to the printers of £. If the country has become more productive, has more goods and services on offer for the same number of £, supply and demand dictates prices will fall. Deflation. When this occurs, if you print money and cause countering inflation, no one will notice that you just stole their money. It will appear to be holding it's value. So that is why they expand the money supply when productivity rises. Stealth theft. Because they can and it advantages them to do so. All the rest is simply justification for that theft. Econobabble.
until you get rid of these nationalist basket cases you're scroooood....the sweaty idea of fiscal prudence is to have everything handed to them on a plate for nothing...most are a bunch of freeloaders with no idea of where the money comes from or even give a rats where it comes from as long as they get everything for nothing.
I'm a socialist, not a capitalist, so my very considerable net worth is in what I say, what I do, not in what money I have. What I "worry about" is Tory banksters robbing blind Scotland's clueless politicians of Scots' net savings, stunting the growth of the Scottish economy. Ring, ring. "Hello, is that the local supermarket? This is your local bank here. We've run out of money. Can we borrow some of yours?" Saved money in the black economy would be in cash, which reduces the money supply. The "stealth theft" of Scotland's money is when the UK government or the Bank of England borrows (or prints) Scotland's net savings. The only solution to that is to allow the Scottish government to borrow our own money, with a new fiscal framework deal with greatly enhanced borrowing powers.
Who is "scrooooo"ing the Scots is the UK Tory government and Bank of England related Tory banksters, borrowing Scotland's net savings with no complaint from the SNP because basket cases like Derek Mackay have no idea how to use government fiscal borrowing powers to reinvest net savings, so don't even demand those fiscal powers, are happy with the crumbs from the master's table.
Tory banksters.....net savings......don't make me laugh...the Scots have been successfully crapping over themselves for a considerable time now without the assistance of "tory" banksters...whatever they may be! I watched the prats at Govern and Clydeside piss their jobs away because they were so wrapped up in their pathetic socialist rhetoric that they left the real world and watched as it took their jobs, made better ships, did it faster and at a fraction of the cost. I've seen the results of your freebooting socialist fantasy played out firsthand pal. Torybanksters......listen to yourself
IDK what's worse, a crack at the Tory party, or sneer at the Bank of England. May I remind you that Westminster is where parliament is and the Tory government is the British government.
The Scots have been "crapped over" since 1603 by the union monarchy and since 1952 by Queen Elizabeth and Her Majesty's Governments (and I use the term "Majesty" very loosely because there is nothing "majestic" about "pissing jobs" away as the UK has done throughout the "prat" Queen's rule). We Scots have never been allowed to govern ourselves democratically but have been dictated to by a royalist, fascist police state ruled over in the monarch's name by a cabal called "the Privy Council of the United Kingdom" which is not known for its "socialist rhetoric" even if some of the time, the Prime Minister whom the Queen in Council appoints has been from the Labour Party, a political party which employs socialist rhetoric but maintains a working accommodation with the royalists who rule the kingdom. The UK royalist fascist police state has all the military and all the police at its beck and call. Socialists here have no army and no police and no guns either. We are entirely at the mercy of the state; we can be arrested whenever our rhetoric displeases the police and it that makes our rhetoric sound "pathetic" then that will be why. None of this United Kingdom history can remotely be described as "a socialist fantasy". Admittedly, there have been certain socialist inspired improvements from time to time. So life here for the people is better than pure monarchy or pure capitalism red in tooth and claw, but it is far from a socialist fantasy. The UK is a kingdom, it is ruled by a monarch and her lackeys, and the UK does what it says on the tin. By the way, I think you mean Govan.
A name change alone should not, in my opinion, be enough to save the Pound Sterling as the sole currency which the Scottish government uses. As the price required to save the £, the Scottish government should demand to be granted new powers to borrow from the Bank of England, interest-free, every year, an economically significant percentage of GDP. Every man, every country, has his / their price and I recommend that Scots settle for no less than 8% of Scottish GDP with no total debt limit. Currently this would amount to Holyrood being able to budget for an additional £13 billion a year. Eurozone countries are supposed to limit their fiscal deficits to 3% of GDP but I believe that to be the cause of the Eurozone's sluggish growth rates by world standards. So I would not ask my fellow Scots to settle for 3% but to hold out for 8%. If no deal for a new fiscal framework can be agreed, I would recommend that the Scottish government now establish a new Scottish currency, initially to be used in parallel with the Pound Sterling. Hopefully such bold action would impress upon the United Kingdom that Scotland was seriously disagreeing with the previously agreed fiscal framework deal. Scots want a new and better deal fiscal framework. Give us a new deal. Now. OK then - "PLEASE". Are you happy now!
You can't borrow interest-free from the central bank to grow your economy. Whenever the central bank makes loans below what normal market rates otherwise would be, the cost is bourne in inflation; much of that just ends up coming out of government purchasing power.
A sovereign government is the master of its own central bank and can do whatever the hell it likes with its own money. It is like when you take money from your own wallet. Does your wallet say to you - "hey, that will be 5% interest!". No, that would be daft. Your wallet can't refuse you and a civil servant central bank cannot refuse to do as its owner government commands. The issue with the Scottish government is that it is not really a sovereign government with its own currency and central bank. The Scottish government is just a subordinate body of the United Kingdom which just calls itself a "government" to boost its image. The central bank has powers to moderate inflation, which do concern interest rates charged or paid to THIRD PARTIES, not to its own government. I suppose if a country absolutely wanted to have its own government pay interest on its debt to its own central bank then that is a possible play-acting farce to act out, if a country really wanted to do that. The situation is somewhat more complicated when countries enter into a currency union when borrowing powers of each government are limited by agreement and sometimes countries even hold to those agreements. Otherwise if countries disregard the agreed limits and print new money without limit, they are effectively endangering the common currency, there are in effect printing their own currency which other countries will no longer agree is a shared currency. The economic effect of government borrowing varies depending on what else is happening in the economy but for example, when a rich country saves more than it borrows then the government has to borrow the net savings or the central bank has to lend the net savings out to third parties, otherwise recession will occur. Yes inflation can occur but that can be moderated so long as borrowing is not excessive.
Can you borrow some of my money? No mate you spent all mine first. Try earning your own. Your words have no value. They feed and cloth nothing. In exchange for your valuable words, I will trade you my valuable words. That's all yours are worth to me. Saved money in the black economy = close to zero pounds. It will cost you more money to find it than it is worth, you know from the evidence of your own net worth kept in the black economy, how much you can expect to find. The process of shops lending to banks to meet their reserve demands is known as "overnight money". It was part of my shop revenue stream. The bank didn't ring me, I rang them. Supermarkets are so cash rich they even start their own banks and credit cards. Try not blaming anyone else. Try not looking to anyone else. Try accepting responsibility for yourself. The principle that the squeakiest wheel gets the most oil is a solid one, but there is no pride in it. Feelings of inadequacy and inferiority, it's no way for a person or a people to live.
The problem with Scotland having it's own currency is twofold. Stability and trustability. If you listen to your own anti banker rhetoric, you can see that Scotland is overly socialist politically, not a place where so many people trust to invest. Politicians all promise confiscate all the wealth. So capital flight. Low inwards investment. And then stability, core industries are limited. Whiskey oil and UK government. So vulnerable to shock and erratic interest rates and exchange rate values. That said it's perfectly doable. Go for it. We bailed your failed banks out, not for the first time either, we'll do it again,
Scotland can be described as a socialist fantasy. It's basically a one party government. Nationalist and socialist in ideology. The economy of Scotland is more government owned, more communist, than the Soviet Union at it's peak.
When you own your own state bank, you can't take money from it that isn't in it. It's not taking a fiver from your own wallet when your wallet is empty. Instead you have to print money. Which devalues everyone else's money. It is like taking a fiver from all your friends without them seeing. The effects of this on the national economy are many. Price inflation and wage deflation. It's a stealth redistribution of wealth from cash savers to the government. It's a stealth pay cut for the entire country. It's raises the price of all goods and services, causes inflation. And it raises the £ value of assets. Provides the illusion that the rich are getting richer. (They in fact own the same, but the number of £ they can trade their possessions for are more).
Our wee warped pal won’t agree with that to him it’s a right of entitlement ... we make sure that the sweaties get free uni, dole and ion bru under the wealth transfer schemes from the south east to the freebooting tossers up north. As per our mate who has issues with employment and gender assimilation
