The unfairness of bailout money seems to be obvious to everybody, especially when a banker’s bar bill amounts to £43,067.50.

To appreciate the illogic requires thinking along the lines of

1. the creation of money

• Where does money come from?
• Who has the power to create it?
• Are banks the only ones who make it by lending it?
• Why should they stop lending, if the economy needs it?
• Why do governments borrow rather than create it?

2. the national debt

• What is the purpose of the National Debt?
• Who pays for the interest on the National Debt?
• Who receives the interest payments?

3. the money supply

• why do the banks refer to Cash as ‘narrow money’?
• why is Credit called ‘broad money’?
• where does interest for Credit come from?

4. the Government’s budget

• income from taxation
• ‘income’ from borrowing

5. the share of the Government’s budget in the money supply or as part of GDP:

• the money supply is generally not taken as a benchmark
• here is a 125-year graph of the Congressional Budget Office
• in the UK, the share was around 40%, but I have not looked for figures recently.

Here’s an article entitled European bank bail-out could push EU into crisis.