Funny really. As the public mood darkens, the dog that should have loudly barked during Alan Johnson's monthly grilling by MPs, health question time in the Commons, was still conspicuous by its silence.

It was a routine session, featuring inquiries about GP led health centres coming into service, the surge in flu cases and attacks on NHS staff, which also seem to be rising.

Wholesome calls for more sport to counter teen obesity prompted Tory jibes about Labour's school playing field sell-off and Johnson's sharp counterblast (new to me) that 10,000 were sold between 1979-97 and only 192 since then.

But where was the talk of the cash crisis which stalks the public services as the bank induced crisis deepens? My hunch is that MPs are still in denial (a bit like those bankers?), hoping that things won't be too bad.

This week the CBI joined the chorus of doom, warning that net public borrowing will rise to 10.6 per cent of annual income (GDP) this year, higher than the post-war record of 7.8 per cent in 1993, John Major's recession year, and higher than Alistair Darling predicted (8 per cent) in November.

That partly reflects the cyclical cost of recession, falling taxes and rising unemployment benefit, partly the fact that ex-chancellor Brown allowed a structural gap to emerge between spending and taxation before the banking disaster.

Steady on. That will probably push long term debt, the stuff financed by Treasury bonds, towards 60-plus per cent of GDP (where the US, France and Germany already are), compared with Britain's 43 per cent. Brown and Darling, who paid off debt in 1997-2000, are right to say the UK is better placed in that regard.

Compare that with the end of the Second World War (1945) when the debt-GDP ratio was 250 per cent, though it was stabilised at 50 per cent by 1947 in sharp contrast to the First World War. In 1918 Britain suffered a major slump and debt was still 180 per cent in 1934. We're not bankrupt, insists wise Vince Cable, Lib Dem Treasury spokesman.

So was I wrong here to dismiss alarmist talk about the collapse of private finance initiative projects? Yes and no.

In the past few days the private finance trade lobby, the PPP Forum, has warned that completed public/private funding deals halved last year to 34. Its spokesman, Tim Pearson, went public at the weekend to say that Whitehall will have to find£4bn in 2009 to fill the funding gap created by the collapse of available private sector funds. He estimated the gap at 40 per cent of the projected total as syndicates pull out or cut the share of loan risk they are willing to shoulder.

"What risk?" ask long term critics of private finance. It got very good terms from Whitehall without taking on much risk: the NHS and other public sector players are paying hugely for those new buildings.

True, but they are being built. Now to the tricky bit. The Highways Agency is already planning to lend£400m to private contractors to complete widening of the M25.

There is talk of similar plan B moves in other ministries. None of my health department contacts returned my call.

But wait. Phil Hammond, the Tories' Treasury No 2, is now saying the private finance model is "no longer do-able", so it might be best to "go back to traditional forms of procurement", ie taxpayer-funded and kept on the Treasury's books, pushing up that debt level. "It's simply being pragmatic," he says.

Vince Cable is also worried. "Public investment has absolutely stopped," he says. If the taxpayer is going to have to take more direct risk there should be a "more honest financial structure" argues Dr Vince.

That means the government must "take this problem back on its own balance sheet".

The danger is that markets will panic and decide Britain can't pay off its debts: the cue to sell sterling. Steady nerves will be needed in a long, costly haul ahead.

Remember, the alternatives are worse.