When Us taxpayers are committing $6 trillion already already to banks and the mortgage sector, another $800 billion is almost petty cash. This crisis has changed attitudes towards sums of money and borrowing levels so fundamentally. Unfortunately, there does have to be a day of reckoning. Borrowing does have to be repaid and guarantees have to be met if things go wrong.
Let’s hope this time the US authorities have found the way to put this cash into the system so that it will stabilise the main banks and allow more normal commerce to resume. Even the mighty US has to be careful of just how much risk and borrowing it heaps on the broad shoulders of US taxpayers.
There is a certain irony on both sides of the Atlantic that governments and regulators who wanted to bring an end to easy credit are now resorting to the biggest government credit binge we have ever seen to try to put it right. I still find it difficult to grasp that a so called right wing Republican President should end up nationalising and buying stakes in so many banks. We call that socialism over here, and it has never worked in the past.