Morning Call: pick of the papers

The ten must-read comment pieces from this morning's papers.

1. Biden and McConnell's self-congratulation is unjustified (Guardian)

The fiscal cliff agreement is a jerry-built compromise that neither deals with the slump nor faces up to the long term, says a Guardian editorial.

2. Make nominal spending the new target (Financial Times)

As long as nominal GDP growth is stable, core inflation will remain well anchored, writes Scott Sumner.

3. Carping Labour must come clean about cuts (Times) (£)

The real divide is between those who offer leadership and those who offer only dissent, says Nick Clegg.

4. Now China's new leaders will have to work hard (Guardian)

How they deal with future economic challenges and the Tibet crisis will test whether the claim to wise meritocracy is credible, says Isabel Hilton.

5. America refuses to face up to reality (Daily Telegraph)

As the powerhouse of the world economy, America cannot continue to live in denial and expect to maintain its dominant role, says a Telegraph leader.

6. Housing is in crisis, yet the coalition does nothing (Guardian)

Scotland is taking the lead in housing the homeless, writes Lynsey Hanley. If only Westminster did likewise.

7. Africa is hooked on growth (Financial Times)

The success is not continent-wide but the best-managed countries are pulling it off, writes Sebastian Mallaby.

8. IDS’s rebirth is one of the wonders of the age (Independent)

Sacked by his party in 2003 on the twin grounds of being preternaturally incompetent and sensationally dim, Duncan Smith has reinvented himself, writes Matthew Norman.

9. The Commonwealth has never been stronger (Daily Telegraph)

This great institution promotes trade and freedom – no wonder there’s a queue to join, writes Hugo Swire.

10. We’re obese for the same reason we’re in debt – we prefer to forget the future (Independent)

Putting off hard tasks and difficult decisions costs humanity dearly, says Christina Patterson.

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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.