Brown's Debt-Driven Escape Route Will Cost Us All Dear Opinion & Debate Opinion & Debate Iain Macwhirter On Debt Economy

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WHAT does Gordon Brown have in common with Bernie Madoff, apparently the author of a GBP50 billion hedge fund scam? Well, they both seem to have been running versions of a Ponzi scheme - a pyramid fraud named after Charles Ponzi, an Italian-American confi dence trickster from the 1920s. Only Gordon's "Broonzi" scam is bigger.

A pyramid scheme involves paying returns not from income generated by the business itself, which is bankrupt, but from gullible future investors who think it isn't. Everyone thought Bernie Madoff was a financial genius who could produce high returns year after year, so more and more people entrusted the former Nasdaq chief with their money.

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Brown's Debt-Driven Escape Route Will Cost Us All Dear Opinion & Debate Opinion & Debate Iain Macwhirter On Debt Economy

But to keep the pyramid from collapsing he had to raise ever- greater sums of cash from new mugs to pay off the old mugs. Eventually the sums grew too large and the scam collapsed, leaving everyone broke.

Now look at Brown's Britain. The government has been boosting public spending based...

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