Is this reporter anywhere near right on this? Here's a link: http://www.telegraph.co.uk/comment/columnists/iainmartin/4295219/Gordon-Brown-brings-Britain-to-the-edge-of-bankruptcy.html
... and here is an excerpt:
[B][I]By Iain Martin
Last Updated: 8:36AM GMT 20 Jan 2009
"The Government's bail-out of the banks in October with Â£37 billion of taxpayers' money was supposed to have "saved the world", according to the PM, but now it is clear that it has not even saved the banks. Our money kept the show on the road for only three months.
As the Liberal Democrats' Treasury spokesman Vince Cable asks: where has the Â£37 billion gone? The answer, as Cable knows, is that it has disappeared down the plug hole.
It is finally dawning on the Government that the liabilities of the British banks grew to be so vast in the boom years that they now eclipse the entire economy. Unfortunately, the Treasury is pledged to honour those
liabilities because it has guaranteed not to let a British bank go down. RBS has liabilities of Â£1.8 trillion, three times annual UK government spending, against assets of Â£1.9 trillion. But after the events of the past year, I wager most taxpayers will believe the true picture is worse.
Meanwhile, the assets are falling in value. This matters, because post-nationalisation these liabilities are now yours and mine.
And they come piled on top of the rocketing national debt, charitably put at Â£630 billion, or 43 per cent of GDP. The true figure is much higher because the Government has used off-balance sheet accounting to hide commitments such as PFI projects.
Add to that record consumer indebtedness and Britain becomes extremely vulnerable. The markets have worked this out ahead of the politicians, as usual, and are wondering what to do next. If they decide our nation is a basket case, they will make it so.
The PM and the Chancellor , both looking a year older every day, tell us that for their next trick they will buy more bank shares, create a giant insurance scheme for bad debt, pledge to honour liabilities without limit, cross their fingers and hope it all works. The phrase "bottomless pit" springs to mind for a reason: that is what they have designed.
In this gloom, the Prime Minister has but one slender hope: that somehow, by force of personality, the new President Obama engineers a rapid American recovery restoring global confidence, energising the markets and making us all forget this bad dream.
Obama is talented but he is not a magician. Instead, Gordon Brown's nightmare, in which we are all trapped, is going to get much worse. "[/I][/B]