@oritteropo

There is a long history of Latin American currency crises which I would refer you to as examples of disorderly collapse. That Tsipras would break most of his electoral promises in his recent 4 month extension agreement should tell you that he knows how catastrophic it would be. You can't quantitatively approximate these kinds of events but qualitatively* (TYPO) the following is likely to occur:

1) Bank run - You saw significant withdrawals even leading up to the meeting with the Troika because of the possibility funding will abruptly stop. A stop to euro lending will see mass outflows with the expectation of bank collapse which will itself likely lead to the collapse of multiple banking institutions.

2) Foreign flows of currencies will dry up - Greek bond yields will spike, in effect no one will lend to the Greek government from overseas. Since like any economy, Greece needs to pay its public sector workers and requires foreign capital for imports, to preserve what it has, it will rapidly convert back to using the Drachma which it can issue and print/create. It is likely the banks will follow in turn and convert deposits to Drachma (another reason why people will withdraw money from banks as soon as they think euro support is over).

3) Drachma collapse - The Drachma will then depreciate rapidly. Again, the expectation of depreciation pretty much causes the depreciation. If people expect their currency to be worth less in the future, they will sell it, causing it to be worth less. Any existing savings accounts remaining will be decimated in value. Wages will fall drastically for everyone. Suddenly the cost of anything that relies on imported products (hint, a lot in any economy, especially Greece) will rise several-fold. This will lead to further job cuts, collapse of industries, which will precipitate further job loss, unemployment, output loss etc etc etc.

The tl;dr version of this is that government funding crises whether caused by debt or currency collapse in the first instance are self reinforcing and the consequences of an unmanaged collapse are all but guaranteed to be much worse than austerity but order. There is some evidence that countries who have a massive collapse and see their currency depreciate are then about to recover faster afterwards (a cheap currency boost exports, tourism etc) but the human toll is much more sudden and much more severe.

As far as IMF estimates being unrealistic, sure. All I'm arguing about is what is likely to happen and which outcome Greeks should prefer.

Sure Syriza has talked about the good kind of reform, but he's also promised the rest of what I talked about. None of which the Troika will let him do if he wants retain their funding. Anyone following this should have known he would not be allowed any of these promises he made in his election. Surely Tsipras himself knew this. It was either posturing/bluster or pure politics. Now the stability of his government is going to depend on how he can manage down his unrealistic expectations.

http://www.theguardian.com/world/2015/jan/28/alexis-tsipras-athens-lightning-speed-anti-austerity-policies

@radx

I think we're probably going to end up rehashing old arguments.

The loans weren't the cause of the output loss, it was the huge and fraudulent debt their government amassed. The withdrawal of loans would have been and still would be more catastrophic than what has occurred. I think you're mischaracterizing it as a loss of sovereignty.

The unwillingness to fund fiscal stimulus rather than just bailouts comes back to the whole issue of lack of trust. It's fair to say the new government may not have the nepotistic past of the major parties, but they also have little to no governing experience, particularly with difficult reform. I don't really see Varoufakis as having the wherewithal to accomplish that.

The more they argue for things like raising the minimum wage or reinstating public sector workers, the more difficult it is going be for them to find any semblance of a middle ground with Germany. If they instead came to the recent meeting with a credible plan for tackling corruption then they may have gotten better terms.

Not just TPP.. TTIP is the same but for Atlantic countries, EU - USA. They both also have clauses that prohibits boycotting or giving out negative reviews, anything that may cause loss of profit. They also have parts dedicated to copyright, denying free-for-use and to demanding the highest prison times for anyone sharing anything, denying the rights for stripping DRM from material you own...

I would be here the whole day if i would type each and every ridiculous thing those two "trade agreements" have but essentially they both deny independent nations to make ANY laws that may cause loss of PROJECTED profits.. Not just loss of profits but profits they might lose in the future..

And the court that solves these problems.. wait for it.. is independent jury with three private sector lawyers, no rights to defend nor to be even present, decisions are all secret. In practice three guys selected by corporations make a decision based on the evidence presented by corporations... It is sick and twisted "trade agreement" that is designed to maximize profits, to strip away environmental laws, regulations, worker rights, demands that nation HAS to privatize all of it's services if any corporation so wishes or face the "court"..

@entr0py

The premise is not off at all. Starbucks simply skipped all the moving around steps and located in the "middle of the beach" where the existing coffee shop already was, because (it is likely) that is the best spot in the market.

Starbucks, or any business, does not open to "drive them out of business" they open a store to sell their goods and make a profit.

As someone who has worked with several retailers in very aggressive market sectors (pizza, fast casual, etc) I can tell you that the two vital components to any successful retailer/restaurant are 1) Good location 2) Good Operations. A good location means your customer will see you and get to you. Good operations means once they are there they will be served well.

More often then not when we start working with a new client we look at their competition not because we want to "drive them out of business", but because they have already looked at and evaluated the market. We then evaluate their locations and see if that is still the correct location or not. Markets shift for a variety of reasons - housing growth, retail expansion, major retailers relocating, etc.

"It's easier to steal someone else's customer base than try to create your own." Really? I find this to be the silliest argument. There is a limited amount of money people are going to spend on a product. Lets say a town will spend $1000 a day on coffee. If you open another coffee shop they are not going to spend an additional thousand. The $1000 is just going to be divided up. Maybe there is a slight increase because of access, but by and large people are only going to spend so much. Furthermore, people are creatures of habit. They are actually more likely to continue to go where they have been going unless you offer something better. That better might be a combination of easier access, faster service, a nicer interior, cheaper prices, or better product.

In the city I work in there are several grocery chains expanding and opening new stores. Does that mean people are spending more on groceries? No. What has happened is the grocer with the weakest operations closed. Those locations (over 30) have since been taken over by a variety of both national chains and local independent grocers (all who have better operations). This competition has meant better prices and service for customers.

I buy my coffee a block from my house (and I usually just buy the beans they roast on site) from a local shop. It doesn't bother me in the slightest that other people choose to go to the Starbucks up the street. The coffee I buy is better and I pay a premium for it.

Edit: One last thought - Among the many competitive advantages corporate users have is that they can operate at a loss or lower profit than many "local" stores. That being said the same is not quite as true from franchisee business owners (who have different advantages, hopefully).

@RedSky

Selling assets and, to a certain degree, the reduction of public employment is an unreasonable demand. There's too much controversy about the effects it has, with me being clearly biased to one side.

Privatisation of essential services (healthcare, public transport, electricity, water) is being opposed or even undone in significant parts of Europe, since it generally came with worse service at much higher costs and no accountability whatsoever. Therefore I see it as very reasonable for Syriza to stop the privatisation of their electricity grid and their railroad. There are, of course, unessentials that might be handed over to the private sector, but like Varoufakis said, not in the shape of a fire sale within a crisis. That'll only profit the usual scavengers, not the people.

Similarly, public employment. There's good public employment (essential services, administration) and "bad" public employment. Troika demands included the firing of cleaning personnel, who were replaced by a significantly more expensive private service. And a Greek court decision ruled the firing as flat out illegal. For Syriza to not hire them back would not only have been unreasonable financially as well as socially, it would have been a violation of a court order. Same for thousands of others who were fired illegally, according to a ruling by the Greek Supreme Court.

Troika demands are all too often against Greek or even European law, and while the previous governments were fine with being criminals, Syriza might actually be inclined to uphold the law.


On the issue of reforms, I would argue that the previous governments did bugger all to establish working institutions. Famously, the posts of department heads of the tax collection agency were auctioned for money, even under the last government. Everything is in shambles, with no intent of changing anything that would have undermined the nepotic rules of the five families. Syriza's program has been very clear about the changes they plan to institute, so if it really was the intent of the troika to see meaningful reform the way it is being advocated to their folks at home, they would be in support of Syriza.

Interventions by the troika have crashed the health care system, the educational system and the pension system. Public pension funds were practically wiped out during the first haircut in 2012, creating a hole of about 20 billion Euros in the next five years.

I would like to address the issue of taxation specifically. Luxembourg adopted as a business model to be an enabler of tax evasion, even worse than Switzerland. In charge at that time was none other than Jean-Claude Juncker, who was just elected President of the European Commission. He's directly involved in tax evasion on a scale of hundreds of billions of Euros every year. How is the troika to have any credibility in this matter with him in charge?

Similarly, German politicians are particularly vocal about corruption and bribery in Greece. Well, who are the biggest sources of bribery in Greece? German corporations. Just last week there was another report of a major German arms manufacturer who paid outrageous bribes to officials in Greece. As much as I support the fight against corruption and bribery, some humility would suit them well.


As for the GDP growth in Greece: I think it's a fluke. The deflation skewers the numbers to a point where I can't take them seriously until the complete dataset is available. Might be growth, might not be. Definatly not enough to fight off a humanitarian crisis.

Surpluses. If everyone was a zealous as Germany, the deficit would in fact be considerably narrower, which is a good thing. Unfortunatly, it would have been a race to the bottom. Germany could only suppress wage growth, and subsequently domestic demand, so radically, because the other members of the Eurozone were eager to expand. They ran higher-than-average growth, which allowed Germany to undercut them without going into deflation. Nowadays, Germany still has below-target wage growth, so the only way for Greece, Spain, Portugal and Italy to gain competetiveness against Germany is to go into deflation. That's where we are in Europe: half a continent in deflation. With all its side effects of mass unemployment (11%+ in Europe, after lots of trickery), falling demand, falling investment, etc. Not good. Keynes' idea of an International Clearing Union might work better, especially since we already use similar concepts within nations to balance regions.

Bond yields of Germany could not have spiked at the same time as those of the rest of the Eurozone. The legal requirements for pension funds, insurance funds, etc demand a high percentage of safe bonds, and when the peripheral countries were declared unsafe, they had nowhere to go but Germany. Also, a bet against France is quite a risk, but a bet against Germany is downright foolish. Still, supply of safe bonds is tight right now, given the cuts all over the place. French yields are at historic lows, German yield is negative. Even Italian and Spanish yields were in the green as soon as Draghi said the ECB would do whatever it takes.

The current spike in Greek yields strikes me as a bet that there will be a face-off between the troika and Greece, with very few positive outcomes for the Greek economy in the short run.

QE: 100% agreement. Fistful of cash to citizens would not have solved any of the core issues of the Eurozone (highly unequal ULCs, systemic tax evasion, tax competition/undercutting, no European institutions, etc), but it would have been infinitely better than anything they did. If they were to put it on the table right now as a means to combat deflation, I'd say go for it. Take the helicopters airborne, as long as it's bottom-up and not trickle-down. Though to reliably increase inflation there would have to be widescale increases in wages. Not going to happen. Maybe if Podemos wins in Spain later his year.

Same for the last paragraph. The ECB could have stuffed the EIB to the brim, which in return could have funded highly beneficial and much needed projects, like a proper European electricity grid. Won't happen though. Debt is bad, even monetised debt during a deflation used purely for investments.

In the current situation, "structural reforms" is used to subsume two entirely different sets of measures.

The first is meant to remove what you previously mentioned: corruption in all the shapes and forms it takes in Greece, from a (intentionally) broken tax system formed over decades of nepotism to a bankrupt national media in the hands of oligarchs. The institutions of the Greek state are precisely what you expect when a country has been run by four families (Papandreou, Samaras, Mitsotakis, Karamanlis) for basically five decades.

This kind of structural reform is part of Syriza's program. Like you said, it'll be hard work and they might very well fail. They'll have only weeks, maybe a few months to undo significant parts of what has grown over half a century. It's not fair, but that's what it is.

The second kind of "structural reform" is meant to increase competitiveness, generally speaking, and a reduction of the public sector. In case of Greece, this included the slashing of wages, pensions, benefits, public employment. The economic and social results are part of just about every article these days, so I won't mention them again. A Great Depression, as predicted.

That's the sort of "structural reforms" Syriza wants to undo. And it's the sort that is expected of Spain, Italy and France as well, which, if done, would probably throw the entire continent into a Great Depression.

I'd go so far as to call any demand to increase competitiveness to German levels madness. Germany gained its competitiveness by 15 years of beggar-thy-neighbour economics, undercutting the agreed upon target of ~2% inflation (read: 2% growth of unit labour costs) the entire time. France played by the rules, was on target the entire time, and is now expected to suffer for it. Only Greece was significantly above target, and are now slightly below target. That's only halfway, yet already more than any democratic country can take.

They could have spread the adjustment out over 20 years, with Germany running above average ULC growth, but decided to throw Greece (and to a lesser degree Spain) off a cliff instead.


So where are we now? Debt rose, GDP crashed, debt as percentage of GDP skyrocketed. That's a fail. Social situation is miserable, health care system basically collapsed, reducing Greece to North African standards. That's a fail.

Those are not reforms to allow Greece to function independently. Those are reforms to throw the Greek population into misery, with ever increasing likeliness of radical solutions (eg Golden Dawn, who are eagerly hoping for a failure of Syriza).

So yes, almost every nation in Europe needs reforms of one sort or another. But using austerity as a rod to beat discipline into supposedly sovereign nations is just about the shortest way imaginable to blow up the Eurozone. Inflicting this amount of pain on people against their will does not work in democratic countries, and the rise of Syriza, Podemos, Sinn Féin, the SNP and the Greens as well as the surge of popularity for Front National and Golden Dawn are clear indicators that the current form of politics cannot be sustained.

Force austerity on France and Le Pen wins the election.

Meaningful reforms that are to increase Europe's "prosperity" would have the support of the people. And reforms are definatly needed, given that the Eurozone is in its fifth year of stagnation, with many countries suffering from both a recession and deflation. A European Union without increasing prosperity for the masses will not last long, I'm sure of it. And a European Union that intentionally causes Great Depressions wouldn't be worth having anyway.

Yet after everything is said and done, I believe you are still absolutely correct in saying that the pro-austerity states won't blink.

Which is what makes it interesting, really. Greece might be able to take a default. They run a primary surplus and most (90%+) of the funds went to foreign banks, the ECB and the IMF anyway, or were used to stabilize the banking system. The people got bugger all. But the Greek banking system would collapse without access to the European system.

Which raises the question: would the pro-austerity states risk a collapse of the Greek banking system and everything it entails? Spanish banks would follow in a heartbeat.

As for the morality of it (they elected those governments, they deserved it): I don't believe in collective punishment, especially not the kind that cripples an entire generation, which is what years of 50+% youth unemployment and a failing educational system does.

My own country, Germany, in particular gets no sympathy from me in this case. Parts of our system were intentionally reformed to channel funds into the market, knowing full well that there was nowhere near enough demand for credit to soak up the surplus savings, nowhere near enough reliable debtors to generate a reasonable return of investment without generating bubbles, be it real estate or financial. They were looking for debtors, and if all it took was turning a blind eye to the painfully obvious longterm problems it would create in Southern Europe, they were more than eager to play along.

Nothing is good about this situation and there is no reason to think this will end in anything but Greek default.

Greece's government, elected by its citizens ran up a large and unsustainable debt which was masked by easy credit before the GFC and fraudulent accounting.

There were many contributors. Corruption, hugely wasteful state owned enterprises, joining the euro zone before they were ready to lose the ability to devalue their currency and lower interest rates, and flagrant tax evasion.

But as a country they're collectively responsible for not demanding the necessary reforms of their politicians to ensure they were not vulnerable to a credit crisis when the GFC hit and lenders began to look more scrupulously at individual European countries rather than Europe as a whole. Equally, Italy is responsible for voting Berlusconi into power for every year their economy recorded negative growth under his government. Spain is responsible for not providing sufficient oversight to bad bank lending leading a huge indebting bailout package.

Some of Syriza's reforms are reasonable. Tackling corruption and trying to break up oligopolies are worthy ideas, but they are unlikely to be easy and yield any immediate benefit. Raising the minimum wage and planning to hire back state workers as they have already promised will almost guarantee they will cease to receive EU funding/ECB assistance and later IMF funding.

The simple truth from the point of view of Germany and other austerity backing Nordic countries is if they buy their loans (and in effect transfer money to Greece) without austerity stipulations, there will be no pressure or guarantee that structural reforms that allow Greece to function independently will ever be implemented. These lender government and by extension its people have no interest in transferring wealth to Greece if it stalls its reforms.

Yes fire sales of state owned enterprises suck but the likely alternative at this point if the Troika lending is stopped is that all other lending stops and Greece defaults. At that point there would be mass loss of state sector jobs and sky-rocketing unemployment relative to what is now being experienced. It would take years of reform for the Greek government to be lend-worthy again. There is simply no trust for any alternative to austerity on the part of north Europe.

Currently Greece has reported positive growth in the past quarter and excluding debt repayments is running a budget surplus. Realistically, yes they cannot pay back the 180% of GDP. The likely way forward is after several more years of real reform they (+ Spain & Portugal) would get better terms from the EU as politically, leaders in Germany and elsewhere will be able to make the case that their objective has been achieved.

The ECB's QE package is in some ways already part of this. What I guarantee won't happen is electing Syriza to oppose bailout terms helping to secure that. Germany et al will quite rightly see that if they acquiesce to Greece they will encourage other populist parties in Spain, Portugal, Italy and France and stall reforms.

Could Germany and others in theory provide a huge cash infusion to Greece, Spain and Portugal now? Sure. And those parties would be voted out in the next election and the terms reversed. Even with the relative stinginess of current loan terms, the likes of UKIP and the National Front with their anti-EU stance, have gained political standing in the EU parliament and will likely see huge boosts in upcoming domestic elections.

Not sure I agree in part, what about money leaving the public sector and arriving in the hands of the uber rich is confusing exactly? Russian stuff makes sense though. And nothing makes me say 'oh dear' anymore really.

I also think a lot of the confusion comes from the fact that they're not concealing this stuff like they used to, pimping in the open as it were because we are powerless. Until someone picks up a brick.

"There is nothing that states can do that needs to be done that markets cannot do better. The current technology trajectory is proving the point, many times over. The result is political instability. A paradigm shift. Obsolescence of the public sector. The growing irrelevance of power. Ever less dependent on, and hence loyalty to, the coercive power structure and ever more cultural, economic, and social reliance on the structures that society creates for itself." via.

An example of this technology is Bitcoin which is now where the internet was in 1995. Back then, the confused mainstream didn't get it, but will soon find out why (the likes of) Federal Reserve Notes are to (the likes of) Bitcoin what the radio is to the internet.

Via Liberty.me: The status of the police is bound up with the perception of the value of the entire public sector. The police are the “thin blue line,” long perceived as the most essential and irreplaceable function of the state. Now that this perception is under pressure from public opinion over what happened (and is happening) in Ferguson (and many many other places around the country), a shift in intellectual opinion that's been developing for decades is gaining traction.

What’s at stake here if not the very foundation of public order as we know it? If government can’t do this right -- if the police are accomplishing the very opposite of what they claim to accomplish, namely, to "protect and serve" -- if they are, in fact, undermining the public's security rather than providing for it, (and this is widely understood to be the case, time and time again), then we have the making of not only an ideological revolution, but an authentic turning-point in the history of politics.

Security is not the most essential function of the state; it is the most dangerous one, and the very one that we should never concede lest we lose our freedom altogether. The "night watchman" is the biggest threat we face because it is he who holds the gun and he who pulls the trigger should we ever decide to escape from their "protections" and provide for ourselves.

No man, that body armour, those boots...I'd harvest the bones of a thousand murdered infants to build our bed if that's what it took. Do you think that's what she wants?

I had to go rewatch this. It's practically perfect. Not an origin story, no romance subplot, no compromise. Just a day in the life of Judge Dredd. Love it, but my favourite Dredd story was told in rhyme:

They'd been waiting there since nightfall for the Sharks to come along,
They knew they'd have to pass this stretch of street.
So they'd sharpened up their stickers and they'd brought along their bars,
And they were wearing steel-tipped stompers on their feet.

There was Big Frank Zit and Faceache, Crazy Joseph with his spear,
The Dixon Boys were there and Billy Rat.
Ike the Spike had brought his sister with her homemade ghetto blaster,
And the Ghoul had put new rivets in his bat.

Now it wasn't nothin' personal that they had against the Sharks,
Any bunch of dead-end spugs would do.
'Cos there was nothing they liked better than to mash and bash and stomp,
Same as any normal Mega-City juves.

"A-rumbling! A-rumbling! We love to go A-rumbling!
("AAAH!")
We love to lay in ambush in the night!
("AAAA!")
A-rumbling! A-rumbling! The Zits were born for rumbling!
(SMAK!)
There's nothing we like better than a fight!"
(KRAK!)

Then a headlight pierced the darkness - a rider gaunt and grim,
Daystick drawn and ready in his hand.
     The chin belonged to Dredd,
     And the voice as well, which said:
"You creeps can do your rumbling in the can!"

"It's just one judge!" cried Cindy Spike and opened with her blaster -
"I'll send him back to Central in a sack!"
(SPOING! "AAAAAAA!")
But Dredd's bike absorbed the blast and laid her on the street,
With tyre marks running right across her back.

Then the judge got down to business and his daystick rose and fell,
Striking out at every head he saw.
For though the Zits launched the attack, the Sharks were fighting back -
And self defence is no defence in law!

As the heap of bodies mounted, Big Zit could see his Waterloo,
Waiting just one station down the line.
Oh, sure, he loved to rumble - but he preferred to be on top...
"Let's scram and live to fight another time!"

("Dredd to Control! We got forty-plus juve rumblers fleeing east through Bernstein. Zits and Sharks, back-up required."
"Wilco, Dredd!"
"Med squads and meat wagons to Moreng Alley. Estimate twenty casualties, more to follow."
"Control to all units area Bernstein. YPs on the run."
VRMMMM!
"Pick 'em up!")

In the space of sixty seconds there was a judge on every street.
From watching bays others scanned the slab -
"We got two Zits runnin' fast though the Tamblin Underpass!"
"Krupke here! I got 'em in the bag!"
(THUNK! THUNK!)

They cut them off at Sondheim and they mopped them up on Wood,
On Pedway 12 they corned Crazy Joseph.
He tried to make a stand - but a spear's not worth a damn,
When it's up against a judge's high explosive.

The Ghoul surrendered quietly, he didn't have much choice -
Ike the Spike tried to scale the sector wall -
("Save your bullet, he'll never make it." "Oh no! AAAAAAAAAAAAH!" SPLATT!)
The Dixon Boys all copped it when they tried to hitch a ride,
On the 2020 Zoom to Bernstein Halt.

Big Zit thought he'd play it clever, the law was everywhere,
The safest thing for him to do was hide -
Dredd tracked him down on infrared - "Don't bother to come out!"
"The best place for trash like you is inside!"

In minutes flat they'd caught them, every Shark and every Zit.
To Dredd it fell to ladle out the years -
"Twenty years apiece for Cindy Spike, Billy Rat and Ghoul."
An extra ten left Big Frank Zit in tears.

For Faceache minus half his face, for the hapless Dixon Boys,
For Ike impaled so cruelly on his spike,
For Crazy Joe with his gaping hole, there'd be one final rumble,
Along the last conveyor belt at Resyk.

A-rumbling! A-rumbling! They loved to go A-rumbling!
But the Zits will go A-rumbling no more!
A-rumbling! A-rumbling! They loved to go A-rumbling!
But they should've known they couldn't buck the law!

What in the world are you on about? The private sector gets just as many chances as "the government" to f-up and keep moving forward.

Take a look here for some consumer product recalls:
http://www.esopro.com/erp-blog/industry-musings/the-10-most-disastrous-product-recalls-of-all-time

On that list are corporations like Firestone, Tylenol, Graco, Hasbro, Ford and Toyota. Despite their negligence leading to deaths, they seem to be doing just fine. And those corporations killed way more people than NASA ever has.

Is accountability important? Sure, absolutely. In the case of the Apollo mission, the Program Director was fired. I would the same is true for a lot of those product recalls: the highest up person with direct supervision of the project should be fired.

In summary, I don't really see where "the government" gets off easy while the "private sector" is unfairly punished.

I find it disgusting that people allow the government to have excuses and second chances but disallow the same for private sector. Neither should have excuses! It's not like there weren't inherent risks involved that could've been avoided. For example, NASA was fully aware of issues with Apollo I and was even warned by the astronauts themselves. They went ahead with it anyway and it resulted in a fire that killed all 3 astronauts. It wasn't a "sacrifice that needed to be made for science." It was negligence, pure and simple.
One thing I admit is that there was an artificial drive to get the moon -- which resulted in wasted dollars and lives because of negligence and the absence of pricing mechanisms -- that probably wouldn't have occurred in the private sector. So, how does that affect our everyday lives? How does that improve our lives? That's what the private sector works on. Not government. I think it could've been done better by the private sector as proven by parallel public versus private sectors in other markets. But really, there would have to be a desire and an efficient business plan. I don't honestly see what the problem is for not wanting to go to the moon right now.
http://blogs.scientificamerican.com/the-curious-wavefunction/2014/03/27/are-we-entering-a-golden-era-of-private-science-funding/

Economically, it'd be really counter-productive for them to leave.

They currently receive more in revenue that they pay in taxes and receive more generous social programs than England. Like mentioned, they'll get full control over their oil reserves just as output begins to decline. Also their banking sector (relative to their economy/tax take) is huge and will have to shrink as investors will see it as a risk and divest otherwise.

They'll most likely retain the pound as the currency by default (at least in the short term), but lose control over interest rates. If the economy sours they will have the same problem that indebted Mediterranean countries had, in that all the pressure will fall on wages and job cuts rather than being eased by lower rates or currency depreciation. If they join the euro, they will of course have same issue.

Speaking of which, an interesting point is that with a large liberal wing of the UK leaving, this will strengthen conservative arguments to leave the EU.

Of course it will, in time and the human lives it cost in the process can't be measured with money, thus human lives does not have a value. That's how private sector works.

I see this popping up everywhere where this video is shown, always some one comes up and says how private sector will just magically start doing things right without regulation when they can do things right with the ones we have in place now. I'm pretty sure these people don't actually understand how world works.