What was the problem?

In interview after interview, many business leaders in Britain have been saying things like, "it's not been that bad, we're expecting a tough Spring 2009, but the fundamentals are actually okay". This happened tonight on the Jeff Randall show, with Phillip Green. So why the "enormous panic" of governments? Are businesses running down the roads complaining about lack of credit? Are people falling off rooftops because they can't get mortgages? Not round my way, they're not. You can still get credit if you really need it. The only problem is that you need to prove you are credit worthy and you need to pay a premium (thus fulfilling the old rule that if you want to borrow money, you have to prove you don't need it).

So what was the "Big Panic" that caused all of these European governments to fleece their taxpayers of cash, to ensure that banks can now lend these taxpayers their own cash back to them, but at interest?

Surely it's not because governments are worried about not having their bonds bought up by banks, is it? Surely it's not because if that doesn't happen, then governments will have to pay for all of their spending plans with real direct taxation, which taxpayers would revolt over? Or even worse, they would need to print money up directly to pay for spending, thus causing immediate and obvious inflation?

No, it couldn't be either of these reasons. I must be imagining it. Let's borrow a few hundred billion via bonds then, to support these banks, so they can buy these bonds to prop up government spending without taxation. We owe it to ourselves.