December 19, 2007 (LPAC) -- The Bank of England's bailout of the failed Northern Rock bank could cost every taxpayer 1,800 pounds (over $3,600), according to the British newspaper, the Guardian. The total cost of 57 billion pounds is as much as Great Britain's entire annual national education budget--just for one failed bank. That illustrates the criminal idiocy of the "wall of money" policy being followed by the world's central bankers, including the U.S. Federal Reserve, in face of a global economic collapse in which all leading banks are bankrupt. Such policies can only lead to wild hyperinflation of the sort experienced in 1923 Weimar Germany(pdf). The only solution is to put in effect a firewall as proposed by LaRouche's Homeowners and Bank Protection Act. LaRouche calls for the government to put a moratorium on foreclosures so that people can stay in their homes, and guarantee that the chartered banks stay in operation, while the long-term process of sorting out the rotten debts is carried out. Instead of attempting to bail out the trillions in bad debts at taxpayer expense, the worthless paper must be written off as part of the process of reorganizing the monetary system on a sound basis, in which new, government-backed credit is issued for the financing of productive investments in real wealth-producing physical economic infrastructure.

Britain's Northern Rock bailout was denounced by Liberal Party shadow chancellor Vincent Cable, though without a proposed solution. Said Cable: "It is outrageous that the taxpayer should now be carrying all the risk involved in keeping this bank afloat while having no direct control over its affairs. The government is ensuring that if any sale is achieved, the benefits will go to speculative investors and not back to the taxpayer." Meanwhile, Bank of England Governor Mervyn King revealed that, in November 2006, Prime Minister Gordon Brown (who was then Chancellor of the Exchequer) was warned by a top adviser that "urgent action" needed to be taken to deal with the potential collapse of one leading retail bank. Brown never acted on the warning and did not draft safeguards such as deposit insurance, King told a parliamentary select committee on the Treasury.