Morning Must-Read: Simon Wren-Lewis: Scotland and the SNP: Fooling yourselves and deceiving others

Simon Wren-Lewis: Scotland and the SNP: Fooling yourselves and deceiving others: “Scotland’s fiscal position would be worse…

…as a result of leaving the UK for two main reasons. First, demographic trends are less favourable. Second, revenues from the North Sea are expected to decline…. The SNP do not agree…. The main reason in the near term is that they have more optimistic projections for North Sea Oil…. So how do the Scottish government get more optimistic numbers? John McDermott examines the detail here, but perhaps I can paraphrase his findings: whenever there is room for doubt, assume whatever gives you a higher number…. Governments that try to borrow today in the hope of a more optimistic future are not behaving very responsibly…. Is this a knock down argument in favour of voting No? Of course not: there is nothing wrong in making a short term economic sacrifice for the hope of longer term benefits or for political goals. But that is not the SNP’s case…. I kept thinking I had seen this kind of thing before: being in denial about macroeconomic fundamentals because they interfered with a major institutional change that was driven by politics. Then I realised what it was: the formation of the Euro in 2000…. So maybe that also explains why I feel so strongly this time around. I have no political skin in this game: a certain affection for the concept of the union, but nothing strong enough to make me even tempted to distort my macroeconomics in its favour. If Scotland wants to make a short term economic sacrifice in the hope of longer term gains and political freedom that is their choice. But they should make that choice knowing what it is, and not be deceived into believing that these costs do not exist.