Calculations of the crunch

Pippa Malmgren looks at the wider implications of the financial crisis and where the real costs reside

The social consequences of the financial crisis are starting to become apparent now. The British Budget was the shot that could be heard around the world. The financial crisis is no longer an abstract set of forces gumming up lending. The public is now registering there is going to be a heavy price to pay for the losses for years to come. The recognition of this fact will increasingly influence the public policy choices about how to pay it: inflation, deflation, devaluation or default. For a while, the public could assume somebody had the resources to cover the problem. Initially, the pub...