The Government Expenditure and Revenue Scotland (Gers) figures, published yesterday, were accompanied by the customary whoops of triumph from those on social media who seem to think that anything that looks bad for the Scottish economy must be good news for the Union.

I'm not sure this mentality benefits their cause in the longer term. But they do deserve some respite from the SNP's crushing poll figures, so let's not be churlish. The latest figures, showing that Scotland's "deficit" has grown to 8.1 per cent of GDP against the UK's 5.6 per cent, are embarrassing for the Scottish Government. Let's face it: ministers did not believe the oil price would collapse as rapidly as it did. It's safe to say some Nationalists are privately rather relieved independence day was postponed last September.

But oil does that. As recently as 2000 it was down to $10 a barrel. It rose to $140 a barrel in 2007 only to fall to $38 a barrel 18 months later. It is at present $60 a barrel. Anyone who based an economic programme purely on the basis of oil is asking for it and, to be fair, the Scottish Government never has, though it can be criticised for succumbing to over-optimistic projections of oil revenues.

But Gers isn't really an argument about independence. Lots of very successful countries have no oil revenues at all. Lots of countries have big deficits, the UK for example. The real question is why Scotland's economy with its many strengths - relatively high GDP and labour productivity, for example - is not better at generating tax revenues to match spending.

Labour say the Gers figures destroy the SNP's case for independence as they show that an independent Scottish government, or indeed one with full fiscal autonomy, would have to make deep public spending cuts to balance the books. The Scottish Government says that only with full economic powers, especially borrowing powers, could it introduce the growth policies that will halt Scotland's relative economic decline.

The truth is, they're both right. If Scotland were to become independent tomorrow borrowing probably would have to rise if oil revenues didn't recover. This would put pressure on public services. But nobody should be fooled that Scotland's present state of economic dependency is a recipe for economic success. At best, we are looking at managed decline as capital, people and skills continue to gravitate south or out of the country altogether.

And no-one should think that, by remaining in the Union, Scotland will somehow be immune to spending cuts. Ed Miliband warned in his speech to the Scottish Labour Conference at the weekend that Scotland faces an imminent £2.7 billion reduction in spending through the proposed Conservative austerity programme. But Labour is also committed to austerity.

Mr Miliband made this clear last year when he said: "The next Labour government will face massive fiscal challenges, including having to cut spending." The question is, rather, whether Scotland could do better if it had economic autonomy. How do you give the Scottish Parliament adequate powers to reverse economic dependency?

For their part, the Conservatives love Gers because they invented it in 1996 precisely as a means of demonstrating Scotland's fiscal dependency on the UK. This always seemed curious to me because, at the same time, Conservative MPs complained - and still complain - about Scotland's "begging bowl" mentality and failure to stand on its own feet without "English" taxpayer subsidies.

This is nonsense since Scotland has contributed more in tax revenues over the years than it has received in spending. Not that I favour that kind of bean-counter nationalism any more than the bean-counter Unionism we heard yesterday. This just prevents us looking seriously at how Scotland's economic condition - serious but not terminal -can be improved.

The real question posed by Gers is what is happening to the underlying Scottish economy, the one beneath the oil figures. Here the problem remains the one identified by the Institute for Fiscal Studies during the referendum campaign, which this column has raised before: Scotland's ageing population.

Thanks to longevity (a good thing) and out-migration (a bad thing) Scotland's population is ageing rather rapidly. Older people cost more and contribute less to the tax base. They contribute in many other ways and have contributed all their lives through their taxes, so let's not lapse into casual gerontophobia.

But financing Scotland's ageing population, given Scotland's poor historic growth record, is going to be a problem whatever Scotland's fiscal arrangements are with the rest of the UK. Indeed, the Smith reforms may well magnify the theoretical Scottish "deficit". This is because more of Scotland's spending will have to be financed directly from a shrinking tax base; that is, the pool of workers paying income tax.

I have no hesitation in saying that the Barnett Formula is probably preferable to the Smith income tax powers. The former may involve a squeeze on Scottish spending over time because increases are based on population share, but not as great as the Smith squeeze is likely to be. The Scottish Government presumably realises this and hopes that it will never happen because Scotland will soon gain all tax raising powers, and perhaps they are right, though I wouldn't bank on it.

Under Smith, the Scottish Government does not have access to revenues from the full range of taxes but only the least buoyant one: income tax, which accounts for about one third of tax revenues collected in Scotland. When oil goes back up - as it inevitably will because it is a finite resource - the Scottish exchequer will not benefit from the revenues generated.

With fewer workers paying income tax and most of them increasingly in low paid jobs, the Smith taxes could leave the Scottish Government dependent on a shrinking source of revenue. It can address this in two main ways: either by increasing the working age population through immigration or implementing expansionist policies that require increased borrowing.

Neither will happen under the present constitutional relationship, so the challenge to Unionists is to explain how Scotland's relative decline and dependency can be reversed without Holyrood being equipped with the kind of economic powers that actually make a difference.

But to repeat: reducing this complex economic argument to the price of oil is crass. Some of the wealthiest countries like Denmark and Finland, and some of the fastest growing economies in Eastern Europe in recent years like Latvia and Slovakia, have virtually no indigenous energy reserves.

This doesn't prove that Scotland could be a prosperous independent country; nothing can. But it does prove it is possible to get by without prodigious oil wealth. Oil is only ever a bonus and sometimes, as in countries such as Nigeria, it turns into a curse.

Economics is a dismal science at the best of times, and the truth is there aren't any easy answers for Scotland in or out of the Union. But what everyone needs to agree on is that the present situation is not sustainable; unless, that is, we just become a tartan theme park and be done with it.