The Spectator on the Government’s £50 billion bailout
Though largely forgotten now, the headlines ten years ago this week had an uncanny resemblance to those of the past few days. There was an emergency bail-out, demands to slash interest rates, bankers warning that the world’s economic system was in danger of systemic collapse — countered by disgusted voices warning that nothing good would come of using taxpayers’ cash to prop up failed financiers. The only difference was the scale. The bail-out of the collapsed hedge fund Long-Term Capital Management in 1998 cost US taxpayers $2.3 billion. This week’s bail-outs will cost US taxpayers $700 billion and British taxpayers £50 billion. And already there are warnings that these mind-boggling sums will not be enough.
The disgusted voices of 1998 were right. There is a connection between what happened ten years ago and what is happening now.
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