Monday, September 2, 2013
The problem with these guarantees is that they don't come out of a safety fund, but are only transfers. So "For Icesave alone the payouts cost the government Â£3.5bn, and protected 230,000 savers" means that each of the 30 million workers in the UK paid 100 pounds each to the 230,000 savers. So its not really a guarantee for most of the public, more of a liability. In fact as everybody knows, the payout are worse and more than this. Stop somebody who works in the street, and the government guarantee is a forced liability with no return i.e. not great at all.