In the race to sacrifice the public good for private profit, England has once again taken the lead. Could this be our future?

(Bloomberg) -- Chancellor of the Exchequer Alistair Darling this week will introduce guarantees for mortgage-backed bonds, allowing buyers to sell the securities at no loss, an effort to revive lending and wean U.K. banks off government aid, two people familiar with the plan said.

The Treasury will offer guarantees for about 50 billion pounds ($73 billion) of the bonds through the new mechanism, the people said. Treasury officials hope the backing will help banks now dependent on state support to write loans.

The program is aimed at reviving the $400 billion market for asset-backed securities, which funded a third of the mortgage market before the credit crunch started in 2007. Banks including Merrill Lynch & Co., Deutsche Bank AG and Barclays Capital have cut staff selling the bonds. Alliance & Leicester was the last British bank to sell the bonds in August 2008.

“It’s not clear that this will work,” said Danny Gabay, director of Fathom Financial Consulting and a former Bank of England economist. “It’s the assets that are the problem, not the derivative. Until there is some clarity on how far house prices will fall, it’s difficult to know if these schemes will work.”