Thursday, 25 February 2010

The Cost of RBS

Is there any way to measure or to demonstrate that we shouldn't have bailed out RBS?

Today's losses of £3.6bn are basically a loss of just over £3bn to the tax payer. So we can add that to the total cost, as well as the interest we would have all earned by sticking it in a regular savings account from now until we get it back (if we ever get it back).

Now, I know people like to say "but who's going to lend money to businesses" but that's a spherical cow argument. If the government lends/gives £1 to RBS, that's £1 taken from the taxpayer. Taking that from the taxpayer means they don't spend it on lattes, DVDs or cars, which give money to businesses. So, in effect, rather than businesses getting money from customers in the form of income, they instead have to get it from banks in the form of loans. Hardly the most efficient arrangement.

Any idea how much we've spent so far (plus interest)?

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