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.