You're wrong about a few things, but for now I'll just pick on one.
You do realise that the 'IB' in LIBOR stands for 'inter-bank'? The LIBOR rate has no bearing on the cost of a sovereign government's cost of funds - e.g. in US, treasury bills. The spread between them can be quite volatile (http://en.wikipedia.org/wiki/TED_spread). In short - governments don't lend or borrow at LIBOR - that's the point of having LIBOR in the first place.
I understand that (though my understanding of this particular situation is less deep than that of the US banking crisis). It's also my understanding that LIBOR is used to determine rates for municipal bonds, consumer loan rates (including loans insured by government), and other types of debt that do impact taxpayers and consumers. The LIBOR is a baseline...manipulating it manipulates the entire lending market in the UK. That's illegal and unethical and screws a bunch of people over and compromises the integrity of every bank that participates. (At least, that is my understanding of it, but I'd never heard the word LIBOR until two days ago.)
You do realise that the 'IB' in LIBOR stands for 'inter-bank'? The LIBOR rate has no bearing on the cost of a sovereign government's cost of funds - e.g. in US, treasury bills. The spread between them can be quite volatile (http://en.wikipedia.org/wiki/TED_spread). In short - governments don't lend or borrow at LIBOR - that's the point of having LIBOR in the first place.