We think this is much too gloomy about the prospects for that idea of a Scottish debt issue, of kilts bonds:
Scottish independence is about to be dealt a fatal blow
First Minister’s plan to issue bonds takes the SNP’s financial ineptitude to new heights
In fact we think the truth is entirely the other way around.
In reality, there are two big problems with the plan. To start with, Scotland’s credit rating will be terrible. We can forget about whether it is a single or double A. The alphabet doesn’t have enough letters to capture how poor a risk it will be: the CCC that is traditionally the lowest possible score does not begin to capture it.
That could well be true, tho’ perhaps CCC is to overstate it.
However, we should also recall that prices are information. We might not like the information that prices give us, but then that means that prices are - in such a case - that boot up the backside so necessary. Issuing kilts therefore becomes an independent source of information about the fiscal performance of the Scottish Government. Something that could well be useful, no?
Which is also a useful insight into what those bond vigilantes are. It’s not some shadowy cabal deciding upon what the price should be. Nor is it a political judgement on whatever it is that is being done. It’s simply people deciding, by putting down their cash or not putting down their cash, the price at which the more and less spendthrift can borrow money. As such it is that independent judgement of people waving their own wallets upon that fiscal stance.
Kilts would thus be hugely useful information to the Scottish Government. As we support more information to governments - one of their biggest problems, as we all know, is the lack of reliable feedback and information systems - then we support the issuance of kilts.
That the current answer might well be BB- or even CCC is information that is useful to have. And far from it then being a death blow to independence it is, we think, a necessary step towards it*. Independence, if it is to happen, requires a fiscally continent Scottish Government. If kilts produce the boot up the backside that produces that then why would any object?
Or, to put it another way. Kilts issuance might well show how terrible the financial position is of the current Scottish regime. At which point some might grasp the lesson that the bond vigilantes are giving - you’ve got to do much better than this, Matey, if you’re to have independence. Which would be good for of course doing better would be good whether independence happens or not.
The price of kilts would be a price and so and therefore useful information. We’re fine with that.
*We’ve no particular view on the independence of Scotland. Of course, we’ve all got independent views on the desirability or not of it but in that we’re like any other group concerning the point. We default down to Mencken on democracy - the point is that the voters get what they ask for, good and hard.