What about cutting the financial sector as well as the public sector

  If I were a conspiracy theorist, I’d be saying that it had all been planned.  The banks knew the crisis was coming last year and that they couldn’t trade dodgy mortgage securities and lend forty times their core capital without coming a cropper.  So, they held a gun to the government’s head:  take  our toxic assets or we blow the economy up.  The government obliged with a £1.3 trillion pound bail out.

    But things weren’t going well at the turn of the year, with public anger at Sir Fred Goodwin’s pension creating pressure for real reform. So they took MPs out one by one and shot them - or rather exposed their expenses fiddles to the Daily Telegraph, which amounted to the same thing.  That drew a line under the campaign for banking reform, as public anger against Sir Fred and City  plutocrats turned to public anger against flipping MPs and their duck houses. 

   But there was still the problem of how to hide the massive cost of getting the government to take on the bad    debts of the banks.  So they dusted down a few myths from the 1970s that every middle aged newspaper reader would understand: profligate public spending. The bloated state.