Why the government has to act

For far too long the estate agents and the banks have been allowed to write their own wage packet. Estate agents have been pulling figures out of the air on house prices knowing as long as they were more than the last company they would get the deal. It was in their interest to put the prices as high as possible as they earn a percentage of that price.

Unfortunately they have been allowed to set whatever prices they wanted too because the banks would loan money to people who had no chance of ever paying it back. In short they don't earn enough. However low early payment schemes that rise after x amount of years convinced people they could.

Well eventually the bubble has burst and because of it the whole country (world) is about to have a very rough ride (and that's an understatement).

I believe we're on the verge of a recession never before seen. As the banks continue to fail and the population gets more and more nervous, what happens is everyone stops spending and the economy comes to a screeching halt. Unsure of what tomorrow holds the population starts sitting on any money they have and as such business start going under, people lose jobs and the whole thing gets into a downward spiral completely out of control. The economy relies on people passing around their money to each other to keep the cogs turning. If we all went to the bank and tried to withdraw what we have there's not enough. The problem is the banks have taken it to extremes in the chase of making their profit levels and earning their million pound bonuses.

If the government don't act to save banks businesses use the ability to trade / pay wages and more and more are thrown onto the dole. Not enough people are in work to support the social security so taxes will go up.

In short the government has to bail out the problem. Having done so they should then throw the bosses in prison for bringing down the country followed by themselves for allowing it to happen. Over the next twelve months its going to be very much a case of survival of the fittest.

Unfortunately the financial bail out has next to zero chance of ever being recovered. It is bad debt being bought and the debt is secured on properties that are grossly over valued. In short it's like expecting a heroin addict to return money they're lent.