Another £25bn to add to taxpayer debts

michaels

My take on who is paying

Lots of people borrowed money they will now not pay back - who will pay for this?

Bank shareholders have made up a fair bit

Taxpayers have also coughed up some

Now those who ran their affairs sensibly (individuals and businesses) are being tapped for the rest. The mechanism is through an interest rate and competition environment which is allowing the banks to make excessive profits form their solvent customers. Obviously the govt likes this as the taxpayer is not in hock through supporting bad banks directly or bailing them out when they fail. However it is deeply unfair as rather than everyone paying equally as would happen if it was taxpayer funded it is those who have saved or borrowed sensibly who are bearing the brunt, those who live paycheck to paycheck without saving or who go bankrupt get away with enjoying the consumption but never paying for it.

chucky

julieq wrote: »

It isn't hard cash in crystallised losses, it's an estimate. The thrust of the article is that it could be revised up or down, and Peston (arguably the most irritating person on the planet) as usual is grandstanding without really drawing any conclusions, but his parting shot is that it may cost nothing at all. He can say he's right more or less whatever happens.

So there's a cost to the insurance scheme between zero and some very large number well north of £25B. Well thanks Robert, tremendously useful information as ever.

what Robbie Peston forgets to mention which would add the balance to his argument (even thouigh all of this is an estimate) is that when this debt is actually repaid there may/should be a decent profit for the Government.

an example is the Goldman Sachs bail out repayment...

When combined with $318 million in dividends that Goldman paid on its TARP infusion, the annualized return for taxpayers was 23%, according to the company.

http://online.wsj.com/article/SB124828408169372855.html