Re: Big outsoucing companies
No, most of the increase in public debt/borrowing was NOT used to pay off (I think you mean) rescue the banks.. All the money used to rescue the banks was either on a secured loan basis or by buying the equity. As such, any debt incurred was balanced in the books by assets (the value of the loans and/or equity) and it was never counted towards the national debt. The Lloyds bail-out is a particular example as it's almost all been sold back into private ownership and a modest (paper) profit has been made (and Lloyds wouldn't have been anything like as parlous state if not prevailed upon by Gordon Brown to bail-out HBOS; a disaster for the shareholders.. RBS is a rather different thing as it's performance has been abysmal and the share price is way below what the government paid. It will be a longer haul back.
But the point remains, this was never counted against the National debt. The credit options offered (mostly not taken up) were of the same sort. They were offered as a sort of over-draft facility to be drawn on as a lender of last resort.
Where the huge deficit did come in was the collapse in government tax revenues after 2008 due to the recession that followed and the cutting off of tax revenues from the financial sector (previously a huge source of income). Add to that the reduced economic activity and the the efforts that Alistair Darling made to stop the economy tanking, mainly by being fiscally very loose, and you got those huge deficits following on from 2009. That was on top of a 3-4% deficit at the height of the economic cycles to which we can add Gordon Brown had been rather loose with his fiscal approach and had generated a lot of off-book liabilities through such things as the massive increase in PPP projects which had the short term effect of not dumping debt on the public accounts by direct investment, but at the huge cost of future, unbooked, current account liabilities for some very expensive contracts.
So yes, the banks reckless actions triggered it, but they had politicians on the sidelines (in many countries) cheering on this financial castle built on sand as, for years, it poured forth money into public coffers. This wasn't helped when some countries also dipped heavily into the pot of easy money willingly lent by (often state-backed banks) in Europe. Hence the crisis of sovereign debt, a mess that Greece is still floundering in followed by a few others (like Italy, Spain and Portugal). The exposure of those commercial banks (even if state owned) to sovereign debt is still hanging there as a threat.