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In October 2002 George Bush held a gun to the world’s head.

Saddam Hussein posed a “grave threat”, the president insisted, justifying the invasion of Iraq.

Six years on and Bush’s finger’s again on the trigger, this time over the $700billion bail-out of US banks.

Just as before, he said it was an open-and-shut case – approve the deal or face financial Armageddon.

Yet the war in Iraq proved Bush wrong. Could his latest apocalyptic judgment be just as wrong?

Early this morning the Senate voted for the package, but it is still not a done deal – and has to go back to the House of Representatives.

Critics of those dissenters who voted down the rescue package in the House of Representatives earlier this week accused politicians of thinking of themselves with elections looming.

But others could argue they were listening to the very people who elected them, the vast majority of whom bitterly oppose the deal. Many say the high-stakes card sharks gambled big and they’ve lost big – and they were betting with our money.

The taxpayer resents having to put his hand in his pocket just so fat cats can do it all again. The feeling is, heads they win, tails we lose.

Killing off the proposal would have shown Congress was in touch with voters. If only it were as simple as that. Rejecting the deal would have made the situation a whole lot worse. It may seem as if banks are dropping like flies now. Without a massive cash injection, many more will fail.

Paralysis of the money markets, recession and raging unemployment threaten to ensue.

But despite the inevitable pain, the world will go on turning.

Those “bad” banks still with toxic debts are likely to go the wall but the “good” ones will thrive. The downside is less competition when it comes to current accounts, loans and mortgages. And the taxpayer will pick up the tab one way or another. More banks will be nationalised, as has happened with Northern Rock and Bradford & Bingley.

And the economy, already reeling, will take an almighty hammering.

Investment bank BNP Paribas believes the UK economy alone will take a £200bn hit over the next five years if the deal does not go through.

Yet some believe there is a third way that prevents all-out anarchy without lumbering the British taxpayer with dodgy assets.

One option is to buy shares in troubled banks. That way it would still inject the necessary money and enable the taxpayer to benefit from the bank’s long-term recovery.

Others argue the only way to cure banks of their innate greed is to rip up the rule book and start again.

Only with this level of shock to the system are City dealers likely to change their ways.

It might seem like a doomsday scenario but it could teach the banks a lesson that ensures we never find ourselves in this mess again.