It’s not rocket science, it was common sense....of course that’s in short supply in Washington DC.
They defaulted on their obligations. It’s a great move, unless you ever want to borrow money again.
“Iceland did not bail out the banks or the bank investors and its economy is thriving”
Our model beats theirs. We bailed our banks with taxpayer money and the bank execs are thriving: “All-Time Record: Wall Street Compensation Hits $135 Billion” http://blogs.forbes.com/robertlenzner/2011/02/02/alltime-record-135-billion-wall-street-compensation/
The joke is on the rest of us: Iceland, unable to obtain foreign capital after the banks went bust, negotiated a 2.1B rescue package from the IMF.
Iceland essentially paid off domestic depositors by stiffing their foreign counterparts - possible because of the large relative size of the latter’s deposits.
And the current government is still having to force lenders to write off around 1.3B in domestic consumer debt.
Of course the 4th quarter US GDP growth rate was 3.2% annualized, greater than than the 3% listed here for Iceland. So does the author have a point? He pulls one statistic out of the air, and then follows it up with a couple anecdotes: stores had Christmas shoppers, banks had customers! There’s nothing said in here that proves there to be any differences in the economic outlook of the two countries.