Scotland and Greece

antrobus

IveSeenTheLight wrote: »

I accept that, hence why I am proposing that the region needs to diversify and compete for other markets in order to not be reliant on oil.

My point is that we need to promote a community and economy less dependent on oil..........

Indeed. But you still have to first deal with the deficit.

IveSeenTheLight wrote: »

...Instead of speculate, you could use the word investment. I think you'll find that the UK government is investing. The question is over the level of investment......

Speculate or invest. If you are going to gamble on supply-side economics, in the hope that a tax cut today will generate a tax bonanza at some indeterminate date in the future, you have to appreciate that it is a gamble, and that the gamble may not pay off, and if the gamble does not pay off, Scotland will become just like Greece.

IveSeenTheLight wrote: »

...Most successful large businesses seek money elsewhere (borrow, stocks etc) as opposed to solely using their own available funds.....

The point would be that they also use their "own available funds".

IveSeenTheLight wrote: »

...Maybe you could cite the best businesses that have not borrowed money to grow?....

Perhaps it would be better if you worked out how the government can get hold of its "own available funds" in order to avoid having to rely on 100% debt financing.

IveSeenTheLight wrote: »

...Pretty plain to see that my "simple" suggestion held more options than your single view, so I'm happy to hold my opinion

Not really. Your options consist of ignoring the uncomfortable truth of Scotland's fiscal position and hoping the problem will go away if you mutter some magic words.:)

IveSeenTheLight

antrobus wrote: »

Perhaps it would be better if you worked out how the government can get hold of its "own available funds" in order to avoid having to rely on 100% debt financing.

Not at all.
The country (Government) already generates money which goes into the budget.
There is no 100% debt financing.
Let's keep it real

antrobus wrote: »

Not really. Your options consist of ignoring the uncomfortable truth of Scotland's fiscal position and hoping the problem will go away if you mutter some magic words.:)

Who is ignoring the current economical situation.
I've agreed that the deficit needs to be dealt with but accept that it may be better to deal with it over a slightly longer period.

Nobody's alluding to muttering magic words or hoping the problem will go away on it's own.

Your options was just
(1) increase taxes
or
(2) cut expenditure

I merely offered that there can be opportunity to increase revenue as an example through increased volume without the need to increase taxes.

But, if you want to stray into areas that have not been offered, crack on.

antrobus

IveSeenTheLight wrote: »

Not at all.
The country (Government) already generates money which goes into the budget.
There is no 100% debt financing.
Let's keep it real...

If the government is running a deficit and you decide to cut taxes by say £1 billion, then your deficit will be £1 billion bigger, and you will borrow £1 billion more. That is 100% debt financing.

The only way a government can 'invest' money and not rely on 100% debt financing is by raising at least some of the cost of that investment through taxation. But since your 'investment' consists of cutting taxes, you logically have to rely on 100% debt financing.

Let us indeed "keep it real".:)

IveSeenTheLight wrote: »

....Who is ignoring the current economical situation.
I've agreed that the deficit needs to be dealt with but accept that it may be better to deal with it over a slightly longer period..

A slightly longer period than ten years presumably?

IveSeenTheLight wrote: »

...Nobody's alluding to muttering magic words or hoping the problem will go away on it's own....

Speculate to accumulate seems pretty magic to me.

IveSeenTheLight wrote: »

.
Your options was just
(1) increase taxes
or
(2) cut expenditure...

If you have a look at the Debt-Free Wannabee board you will find all manner of people requesting advice regarding their own personal deficits and excessive levels of debt. On the whole the advice given appears to focus on suggesting areas where individuals can reduce their expenditure and/or earn extra income. The suggestion of borrowing more money in order to fund some get-rich-quick investment scheme does not appear to be that popular.

IveSeenTheLight wrote: »

....I merely offered that there can be opportunity to increase revenue as an example through increased volume without the need to increase taxes.

But, if you want to stray into areas that have not been offered, crack on.

You are clutching at straws. The reality of Scotland's fiscal position is that the loss of that £8 billion English subsidy is too big a number to be wished away by such jiggery pockery.:)

IveSeenTheLight

antrobus wrote: »

If the government is running a deficit and you decide to cut taxes by say £1 billion, then your deficit will be £1 billion bigger, and you will borrow £1 billion more. That is 100% debt financing.

The only way a government can 'invest' money and not rely on 100% debt financing is by raising at least some of the cost of that investment through taxation. But since your 'investment' consists of cutting taxes, you logically have to rely on 100% debt financing.

Let us indeed "keep it real".:)

The flaw in your considerations is that you are not able to consider that you can increase volume.

Let's take Corporation tax. Let's consider the rate was reduced from 20% to 15%, reducing revenue effectively by 5%, however if it helps to increase turnover and increase business by 10%, then the nett effect could be that by reducing the tax burdon, you actually increase the revenue the government receives.

It's the same as the example of Income rate being dropped from 50% to 45%. The government claims that they get more revenue at 45% as opposed to 50%

So, "keeping it real", it can be possible to reduce tax but increase revenue.

It's not necessarily as you simplistically portray it.

antrobus wrote: »

If you have a look at the Debt-Free Wannabee board you will find all manner of people requesting advice regarding their own personal deficits and excessive levels of debt. On the whole the advice given appears to focus on suggesting areas where individuals can reduce their expenditure and/or earn extra income. The suggestion of borrowing more money in order to fund some get-rich-quick investment scheme does not appear to be that popular.

Nobody is suggesting any get-rich-quick investment scheme's.
You do however pick up on a point of to erradicate debt, you have to reduce expenditure AND/OR earn extra income.

To consider your personal "debt free wannabe" scenario.
If a person negotiates with 20 houses in their street, to cut their grass weekly for £5 each.
So despite being in debt, that person may need to invest (borrow)£100 to buy a lawnmower, which pays for itself after a week and then allows an increase in revenue from then on.

Surely you would recommend the "debt-free-wannabe to borrow on that basis.

antrobus wrote: »

You are clutching at straws. The reality of Scotland's fiscal position is that the loss of that £8 billion English subsidy is too big a number to be wished away by such jiggery pockery.:)

No straws, as I have always said, we need to look at how we can diversify the economy and grow it elsewhere in order to be less reliant on oil.

Your eyes are closed to exploring these possibilities.

Mistermeaner

Gosh there's alot of fu ckwittery in this thread.

If we cut tax rates volumes may increase hence net return may Perhaps be larger and if we borrowed more in the long run maybe that borrowing might result in improved returns so we might have more to spend. Maybe.

Can't argue with that

CLAPTON

It's probably true that every government in the world

-would love to reduce tax rates but find their tax take increases due to increased economic activity and/or willingness to pay taxes

-would love to borrow some more money and find their debts reduce

-would love to diversify profitably

so they would be able to have low taxes, be able to fund all their favourite benefits and also have enough to build a huge sovereign fund for the future

the holy grail for every government

logically of course, it is possible in certain circumstances: to deny that would indeed be closing ones eyes to the possibilities

the issues of course are :
-how exactly do we do that?
-are the circumstance in UK appropriate?
-how long would it take to achieve the desired result?
-while we wait to find the holy grail and to achieve the desired results, do we simply borrow more money, safe in the knowledge that people are secretly working on finding the grail?

I guess we could start with fracking but that seems unpopular
or renewable energy but that seems to require large borrowing for little return
or GM crops to boost output but again somewhat unpopular

so it seems I must wait for the secret think tanks to spill the (non GM) beans

zagubov

Firetastic wrote: »

Just a quick question before I go out. If Scotland ever does go independent do you think Scotland will end up like Greece?

You mean have a large merchant navy, a healthy mediterranean diet and lovely mediterranean climate, and an absence of nuclear missiles?

Thrugelmir

zagubov wrote: »

You mean have a large merchant navy, a healthy mediterranean diet and lovely mediterranean climate, and an absence of nuclear missiles?

Orkney is hardly a replacement for Lesbos either.