So that's that decided then...

It has long been self-evident that there are only two ways out of the economic problems: inflation or deflation.  Deflation would actually be the better approach, but the government has chosen the opposite.

Nice.

Can they not see what they're doing; this is 100% guarenteed to kick-off inflation.  But not only that, and believe me that's going to be bad enough, it is also going to cause two unintended side-effects:

Side-effect No. 1 is that the government money will effectively neutralise risk, from the perspective of the banks, so the loans that are made will be essentially random (or, even worse, will be subject to political interference from the paymasters; normal productive working people can fuck off, got to protect the hardworkingfamilies, at all costs).  Which will guarentee that the insurance is claimed, and therefore cost the tax payer the maximum amount.

Side-effect No. 2 is that the government taking such a large role is going to flush out private investment meaning the banks will be 100% government dependent and will, once again, be in serious trouble when the period of guarentee expires.  This will require more bail-outs, or will cause an even bigger economic collapse than we one we're currently looking at.

The sheer evilness of this scheme makes me angry.  If they get the timing right their plan will work (and I don't mean the economy will recover, I mean they'll get re-elected against all the odds).  If they get the timing right the deflationary forces in the economy will temporarially mask the inflationry effects of the scheme, and if enough money is printed then there will be a dead-cat bounce (complete with Kirstie and Phil telling everyone "see, told you!").  Gordon Brown then simply calls a kamikaze election and they've got another five years.  Bastards.  We must not let this happen!  Once they are re-elected there will be a collosal breakdown of society, and the full anti-terror, CCTV, ID cards, communication database infrastructure will be used to create a full managed society.  Good bye freedom, wealth, happyness; I'll be chained to a desk editing websites to remove "errors" (hmm, this American website seems to think the U.K. has turned into a dictatorship, funny way of spelling democracy).  Gordon Brown did save the world!  He did!  HE DID!!!