Scottish Independence

[ayrmad]

That could be like having to put £100 in a savings account at the same time as having to borrow £100 from Wonga to meet your monthly bills.

Over the long term you receive more interest on your savings than pay on your loans.

Norway has a fairly hefty national debt 141% of GDP.

Under the status quo we have no oil fund and debt of £100/£130billion,if we had used all our excess cash since 1980/81 we would have a national debt not much different from todays with a considerable oil fund.

[I'm Brian]

I don't think you have any idea what you are talking about to be honest.

Ditto. It was a tongue in cheek comment

[H_B]

That depends on how the debt - asset negotiations go.

No it doesn't.

Unless you are suggesting New Scotland will run a budget surplus which would be an extraordinary claim.

[H_B]

Over the long term you receive more interest on your savings than pay on your loans.

Got any figures to prove that?

Depends how much it costs you to borrow from the market.

[ayrmad]

Got any figures to prove that?

Depends how much it costs you to borrow from the market.

I posted figures for Reynard in the Latest Polls thread, there's a zipped folder called Historical Scottish Balance Sheet where I laid out 4 options using different assumptions.

I'm not saying their won't be the odd mistake in it(it's a lot of data to find then laboriously copy across, interest rates were taken from a graph by month) or that it's not more simplistic than reality but it does show that it's possible and it shows that it would work far better than just spending it all.

[H_B]

I posted figures for Reynard in the Latest Polls thread, there's a zipped folder called Historical Scottish Balance Sheet where I laid out 4 options using different assumptions.

I'm not saying their won't be the odd mistake in it(it's a lot of data to find then laboriously copy across, interest rates were taken from a graph by month) or that it's not more simplistic than reality but it does show that it's possible and it shows that it would work far better than just spending it all.

What interest do you get from this "oil fund" and how is that calculated?

Say you commit £100 million a year to a savings fund, how is interest on that calculated?

[ayrmad]

What interest do you get from this "oil fund" and how is that calculated?

Say you commit £100 million a year to a savings fund, how is interest on that calculated?

On my wee spreadsheet Scotland paid 0.5% above the UK rate, just in case anyone raised the "but we would have higher borrowing charges", even although as a surplus nation we would have had a better borrowing rate.

I added 1% onto the UK rate +0.5% as you would look to earn 1% more from the markets than you would borrow at, the cash wouldn't be sitting in the Clydesdale Bank etc.

[H_B]

On my wee spreadsheet Scotland paid 0.5% above the UK rate, just in case anyone raised the "but we would have higher borrowing charges", even although as a surplus nation we would have had a better borrowing rate.

I added 1% onto the UK rate +0.5% as you would look to earn 1% more from the markets than you would borrow at, the cash wouldn't be sitting in the Clydesdale Bank etc.

The estimates of Scotland's increased cost of borrowing compared to the UK are a lot more than 0.5% .

Do you have any figures as to what Norway for example get in interest from their savings?

[ayrmad]

The estimates of Scotland's increased cost of borrowing compared to the UK are a lot more than 0.5% .

Do you have any figures as to what Norway for example get in interest from their savings?

Whose estimates, there are fcuked countries not paying 0.5% more.

It's not savings it's investments.

[H_B]

Whose estimates, there are fcuked countries not paying 0.5% more.

It's not savings it's investments.

"Ahead of the one-year milestone, a report by the National Institute of Economic and Social Research said borrowing costs for an independent Scotland using sterling would be between 72 and 165 basis points higher than those on a 10-year British government bond. Scotland would also have to tighten its finances by 5.4 percent to hit EU debt targets, the report said."

Based on the current gilt yield of 2.9 percent, that could mean Scotland paying up to 4.55 percent to issue a 10-year bond.

http://uk.reuters.com/article/2013/09/17/uk-britain-scotland-currency-idUKBRE98G0J120130917

[ayrmad]

Norway end of 2007 $373billion September 2013 $713billion

When the crash came it lost a quarter of it's fund yet it still almost doubled in 6 years.

[H_B]

I'm not sure what question that's and answer to, but it isn't mine.

What interest rate did Norway get annually from their investments?

[ayrmad]

"Ahead of the one-year milestone, a report by the National Institute of Economic and Social Research said borrowing costs for an independent Scotland using sterling would be between 72 and 165 basis points higher than those on a 10-year British government bond. Scotland would also have to tighten its finances by 5.4 percent to hit EU debt targets, the report said."

Based on the current gilt yield of 2.9 percent, that could mean Scotland paying up to 4.55 percent to issue a 10-year bond.

http://uk.reuters.com/article/2013/09/17/uk-britain-scotland-currency-idUKBRE98G0J120130917

Even if true, we'd tighten our belts for a wee while then we would be borrowing below the the 10 year Govt bonds.

[ayrmad]

I'm not sure what question that's and answer to, but it isn't mine.

What interest rate did Norway get annually from their investments?

Are we going to argue that Norway shouldn't have started an oil fund now?

[H_B]

Are we going to argue that Norway shouldn't have started an oil fund now?

Norway runs a budget surplus. Scotland would not.

For this to work, Scots would have to give certain things up. Free University tuition for example.

I'm not against that as a principle, but you can't save and spend.

[ayrmad]

The estimates of Scotland's increased cost of borrowing compared to the UK are a lot more than 0.5% .

Do you have any figures as to what Norway for example get in interest from their savings?

From 1 source, Ireland are .42% above the UK, those figures are all based on the figures Westminster produce for Scotlands Total Tax Revenues, garbage in garbage out.

[ayrmad]

Norway runs a budget surplus. Scotland would not.

For this to work, Scots would have to give certain things up. Free University tuition for example.

I'm not against that as a principle, but you can't save and spend.

That's absurd.

That would change over the long term, we would be in surplus if we'd cut ourselves adrift in 1980 so no reason to assume we wouldn't now, after all our economy was massively dependent on oil back then now it's just a bonus.

Try doing your own figures instead of just taking 1 set of figures as gospel.

[H_B]

That's absurd.

That would change over the long term, we would be in surplus if we'd cut ourselves adrift in 1980 so no reason to assume we wouldn't now, after all our economy was massively dependent on oil back then now it's just a bonus.

Try doing your own figures instead of just taking 1 set of figures as gospel.

Well that's just lies isnt it?

[HardyBamboo]

"Ahead of the one-year milestone, a report by the National Institute of Economic and Social Research said borrowing costs for an independent Scotland using sterling would be between 72 and 165 basis points higher than those on a 10-year British government bond. Scotland would also have to tighten its finances by 5.4 percent to hit EU debt targets, the report said."

Based on the current gilt yield of 2.9 percent, that could mean Scotland paying up to 4.55 percent to issue a 10-year bond.

http://uk.reuters.com/article/2013/09/17/uk-britain-scotland-currency-idUKBRE98G0J120130917

From the actual report;

"The researchers estimate that an independent Scotland would face additional interest rate costs of between 0.72% to 1.65% above the UK borrowing costs for 10 year debt (or technically a spread of 72 to 165 basis points over the average 10 year UK bond yield of 4.10% between 2000 and 2012)."

A couple of important words missed out there.

[ayrmad]

Well that's just lies isnt it?

You actually don't know what your talking about, go and look at oil revenues as a % of GDP back then and compare them to now.