The Joys of Optimistic Planning by Politicians.
The recent referendum in Scotland with regards to their political future has ended in the a narrow vote to remain part of the Union.
Part of the rosy independent future that was promulgated by the Scottish National Party (SNP) was that the vast oil revenues that was coming from the North Sea would provide for the secure financial future for an independent Scotland.
All of this was the vision based upon the rosy revenues being derived by the oil price being at $100+ per barrel.
However, within the space of 3 months, oil has dropped to below $60 per barrel. We are seeing the deleterious effect that financial mismanagement is having on the Russian economy. The lower price is affecting the oil companies who have advised that investing in the North Sea is unprofitable at this price level.
They are scaling back their investment and making redundancies. http://www.bbc.co.uk/news/business-30525539.
How would have effected the financial position of the Scottish government ? Surely this would have delayed or completely put on hold all of the financial promises made.
Are we as the electorate and poor benighted suffering public, not sufficiently fed up with the promises of the politicians of the rosy future we will all have in the Utopian Ideal they offer, but based completely on fairy dust mathematics. They have been learning from the management skills of Fred Goodwin, previously chief executive of RBS, who despite raising £12 Billion from shareholders to put the bank on sound financial basis, then had to be bailed out by the UK government to the tune of £45.5 Billion.
So RBS estimated the amount of capital required, was a mere 20% of the eventual capital investment. This is a good example of the elaborate flights of fancy that seems to emanate from the politicians of the SNP and the Labour Party under the inspiring leadership of Ed Milliband.
Despite these financial failing, no one in the previous Labour government have been held to account for the dire financial situation we were put in. So the SNP and other politicians feel free to make elaborate promises of free services and the continuous expansion of these free services, based upon revenues which have always been assumed to be and have now been shown to be fickle in the extreme.
What would happen if Scotland had been unable to pay their national debts in the future, would they expect that England would bail them out again as they had been following the Darien Scheme in 1707.