Taxpayer Bailouts : The Lie You Need To Know

I have an issue. A problem, a concern. A nag. It’s an itch, and I just gotta scratch it.

It’s this. America, the UK and Iceland have all been bailed out by the taxpayer. You see it and you hear it: “Taxpayer to pump billions of squidoos into financial system” etc.

Except it’s a bald and blatent lie. The USA’s bailout was $700bn. The UK’s bailout has been estimated at $400bn. Iceland is more tame, at about $5.4bn.

But Iceland’s Prime Minister, Geir Haarde, let the cat out of the bag. We’ve been let down by our friends, he said, so instead we’ve borrowed $5.4bn from the Russians.

No talk about taxpayers or any such nonsense. “We” have borrowed money, which “we” are going to have to repay. In contrast, the USA and the UK keep rabbiting on about taxpayers bailing out the economy. They’re talking bollocks.

The reality is that various near, middle and far Eastern countries have lent money to our country and in return your government has committed the taxpayer to pay off the debt for years, if not decades, to come. At least the Icelandic model is more honest.

So understand this. Speculation has laid many of the Worlds’ greatest banks low because they did not have the liquid assets to match their commitments. Many of these banks have been saved by the intervention of their respective governments.

What will happen next is that speculation will shift away from the banks and begin against currencies instead. The spiral of debt will get tighter and speculation will begin against countries, as “people” bet for and against which country has the liquidity to honour those commitments.

One thing’s for sure: not all will be able to service the debts they have taken on, so just as we’ve seen banks being taken over by countries so we will see countries being taken over by superpowers.

This is my itch, the scratch I have to worry away at. Taxpayers, whether they know it or not, have put up no money to save these banks. Instead, they’ve been committed to pay back the debts used to bail out these banks.

Iceland has been bought by the Russians. Who’s bought the USA, or the UK? No one knows — scary thoughts, but as our politicans keep telling us … these are scary times.

Scratch scratch scratch. So which country do you count yourself to be the commodity of? Do you think this will change within the next ten years? Scratch scratch scratch.


Picture Credit: “Closer To The Park” by Torley from Flickr under Creative Commons Attribution Share Alike License.

Written by Chris Milton

is a seasoned sustainability journalist focusing on business, finance and clean technology. His writing's been carried by a number of highly respected publishers, including The Guardian, The Washington Post and Scientific American. You can follow him on twitter as @britesprite, where he's one of Mashable's top green tweeters and Fast Company's CSR thought leaders. Alternatively you can follow him to the shops... but that would be boring.


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