Simon Carr: Asset or liability? Only George really knows

Sketch: The only meaning money will have is what the Georges say it's worth

Monday 22 November 2010 20:00 EST
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When my younger son was five I said he couldn't have a certain luxury item because I didn't have any money. He said: "Write a cheque then." Wise child. I should have rented him to the Treasury: he was in the vanguard of modern economic thinking.

George Osborne came to the House making a pretty good job of looking solid. I may have to downgrade that to "reasonable" this evening and "poor" tomorrow. Things are moving fast and it may be our George and Georges in other countries are what money is based on. (If you keep screaming I shall slap you.)

Alistair Darling asked how much of the loan would "restructure banks" in Ireland – and whether the same would be needed by "other countries". A question that points to the apocalyptic possibility that banks have no idea how much they owe. When they do, the only meaning money will have is what the Georges say it's worth.

Eurosceptics on all sides were delighted. Douglas Carswell said we weren't in the euro as a currency union, but the small print of the Lisbon Treaty made us part of a "debt union" with "enormous non-discretionary liabilities".

Labour's Ian Davidson asked whether George ruled out similar support for any other euro-country. George replied, "as clearly as I can that" ... I'm not sure what. He would issue bailouts, I think, but wouldn't be happy about it.

George did emphasise one important line: "We are out of the financial danger zone." If he can implant this idea he will get through the double-dip (if it happens) by using Gordon Brown's line: "This recession started overseas." Imagine Labour's howls.

Alan Johnson did well. He asked pertinent technical questions and got in a couple of good blows under the ribs. He quoted George's 2006 approval of the "Irish miracle", and he chastised the Chancellor for exaggerated language about Britain being "on the edge of bankruptcy". Here, after all, was a country actually and genuinely there. Both propositions may yet be true.

Still, we can write a cheque. And in answer to Johnson's point, it won't appear on the national accounts as a liability. It's an asset. An investment. But isn't that the thinking that got us into this mess? Does this look familiar to David Cameron? It was Black Wednesday then, but it might be a Black Winter coming up.

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