How public debt is managed is a critical question for any national government acting on behalf of its current and future citizens. It is of particular importance to a newly independent country
"Debt management is a rarely discussed aspect of fiscal policy, including in debates about the fiscal sustainability of an independent Scotland.
But it is the choice that must be made whenever any government sets an expenditure plan. If Scotland were to become independent, future Scottish governments would face a choice of how much to tax now and accordingly what kind of debt at what maturity to issue as a message about future taxes.
The fiscal policy debate in Scotland has concentrated unduly on issues such as Scotland’s estimated net deficit position or how much public debt it might inherit.
But the reality is that public debt is issued to support economic adjustment. Its evolution and costs are the result of the continuous revelation of states of nature that might mean that higher interest rates are perfectly affordable as the economy is booming, or that even low levels of debt pose problems as they are may be rolled over into markets that do not wish to hold them.
An independent Scotland would, in time, need to set out a clear strategy on debt and the issuance of instruments alongside statements about planned levels of expenditure. "